What Is a POS Health Plan? Features, Benefits, and Comparison to HMO

What Is a Point-of-Service (POS) Plan?

A point-of-service (POS) plan is a type of managed-care health insurance plan that provides different benefits depending on whether the policyholder uses in-network or out-of-network healthcare providers.

A POS plan combines features of the two most common health insurance plans: the health maintenance organization (HMO) and the preferred provider organization (PPO). POS plans represent a small share of the health insurance market. Most policyholders have either HMO or PPO plans.

Understanding the Mechanics of POS Health Plans

A POS plan is similar to an HMO. It requires the policyholder to choose an in-network primary care doctor and obtain referrals from that doctor if they want the policy to cover a specialist’s services. And a POS plan is like a PPO in that it still provides coverage for out-of-network services, but the policyholder will have to pay more than if they used in-network services.

However, the POS plan will pay more toward an out-of-network service if the primary care physician makes a referral than if the policyholder goes outside the network without a referral. The premiums for a POS plan fall between the lower premiums offered by an HMO and the higher premiums of a PPO.

POS plans require the policyholder to make co-payments, but in-network co-payments are often just $10 to $25 per appointment. POS plans also do not have deductibles for in-network services, which is a significant advantage over PPOs.

POS plans offer nationwide coverage, which benefits patients who travel frequently. A disadvantage is that out-of-network deductibles tend to be high for POS plans. When a deductible is high, it means that patients who use out-of-network services will pay the full cost of care until they reach the plan’s deductible. A patient who never uses a POS plan’s out-of-network services probably would be better off with an HMO because of its lower premiums.

Potential Drawbacks of Choosing a POS Plan

POS plans mix HMO and PPO features but have a small market share.  Made the sentence shorter and more straightforward. Pricing might also be a factor. POS plans can be 50% cheaper than PPOs, but 50% more than HMOs.

POS plans are cheaper than PPOs, but their details can be confusing, leaving consumers unsure about costs. Read the plan documents especially carefully—and compare them to other choices—before deciding whether this is the best option.

Important Considerations for Opting Into a POS Plan

A point-of-service (POS) plan is a type of health insurance plan that provides different benefits depending on whether the policyholder visits in-network or out-of-network healthcare providers.

POS plans often cost less but may offer fewer provider options. You can see out-of-network providers with a POS plan, but it costs more, and you handle paperwork. Though POS plans can be up to 50% cheaper than preferred provider organization (PPO) plans, premiums can cost as much as 50% more than health maintenance organization (HMO) premiums.

In some ways, POS plans combine the best features of HMO and PPO plans, but you will need to check whether this type of plan works for you.