In a fairy tale world, health insurance costs virtually nothing and covers exactly what you need it to. But for those living in the real world, health insurance is a narrow path strewn with potential pitfalls and traps that keep people from obtaining both coverage and care.

“The majority of people, until they drill down into the costs, want everything covered,” says Colleen King, owner of Colleen King Insurance Agency in the Los Angeles area. King represents several type of insurance and specializes in health care for individuals and small businesses. “The bottom line is how much is someone willing to pay for the coverage they want?”

As Congress grapples with changes to the health care system designed to expand coverage to the estimated 47 million uninsured Americans, many of those who have insurance wonder if their employer-sponsored plans are truly best for their needs.

A good plan, King says, covers doctor visits, offers full prescription drug coverage for both brand and generic drugs, has a reasonable out-of-pocket maximum and includes preventive care, such as annual physicals, routine tests, vaccinations, etc. Other coverages that people might check into, depending on individual needs, include coverages for emergency room visits (although these are at a much higher co-pay to discourage use), durable medical equipment such as wheelchairs, rehabilitation services and physical therapy services. Some policies pay for infertility treatments, but they often have a low lifetime benefit that would only cover a few visits.

Spiraling costs have pushed many employers to drop traditional indemnity plans that offer low deductibles before insurance  kicks in and go with managed care options such as HMOs or PPOs or high-deductible plans that push many of the initial costs onto the consumer. Health maintenance organization and preferred provider organization policies are cheaper than indemnity plans but do not help consumers understand the real cost of care. Co-pays for office visits are often $10 or $20, which does not begin to cover the cost of providing the care.

CDHC plans have high deductibles before the insurance takes effect, which forces patients to think about the care they need. However, these often are coupled with health savings accounts (HSAs), which employers can contribute to or workers can on a pretax basis. The amount that an employer kicks in can vary widely and can be tailored to specific employee health behaviors, such as not smoking, quitting smoking or taking an annual health risk assessment  that allows employers to identify chronic conditions such as diabetes, heart conditions and obesity. Identified workers can be steered into less costly preventive and maintenance measures instead of coughing up more money in claims.

“When comparing health plans, visit their Web sites or call the office and see if your physicians participate,” King says. “You need to specify the particular plan, not just the name of the insurance company to make sure your physician is in that network.”

For families with children, HMOs are a good bet because they offer low co-pays, King says, but PPO and high-deductible plans also have benefits, depending on your age and level of medical need.

Since many premiums are paid through payroll deduction with pretax dollars, those monies cannot be deducted from your taxes. However, if you’re self-employed, medical premiums can be deducted. Also, if you spend more than 7.5% of your adjusted gross income on medical services and devices, it may be deductible on your federal taxes. Check with your tax adviser to be sure.