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Point of service (POS) health insurance plans are a type of provider network that allow beneficiaries to access in-network and out-of-network care. As with a preferred provider organization (PPO), the cost of going outside of the POS network of providers is more expensive, providing a strong financial incentive to obtain care from the plan’s network. POS plan policyholders are required to select an in-network primary care physician (PCP) who serves as a regular source of care for routine visits, approving referrals to specialists, for example, and generally managing the patient’s care. With this type of arrangement, the PCP becomes the point of service for health care.
What is a POS plan?
A POS policy is a type of health insurance plan in which you pay less for using physicians, hospitals and other providers within the network. Beneficiaries are required to choose a PCP who acts as a regular source of care. POS plans require referrals from the PCP to see a specialist. They also allow beneficiaries to go outside of the network for care, albeit at a higher cost. Many POS health insurance plans do not require beneficiaries to meet a deductible.
Differences between POS health insurance networks and other networks
The main differences between POS policies and other types of health insurance plans are costs, where you receive care and if you need a PCP.
What follows are brief descriptions of different network plans:
- Preferred provider organization (PPO): A type of health insurance plan where you pay less for using in-network providers. You can also go outside of the network for care and see specialists without having to obtain a referral. These plans provide more flexibility than the other plans, but they are more expensive.
- Health maintenance organization (HMO): A type of health insurance plan that only pays for care provided by the plan’s network of physicians and providers except in emergencies. With some HMOs, beneficiaries have to live or work within the HMO’s geographic area to receive care. Beneficiaries are required to select a primary care physician as a regular source of care. The PCP has to approve referrals to specialists.
- Exclusive provider organization (EPO): EPOs, like HMOs, only pay for in-network care except in emergencies. Unlike with HMOs, you don’t need to designate a PCP to manage your care, and you don’t need a referral or prior authorization to see in-network specialists.
Key plan characteristics
|Premiums||Cheapest||Cheaper than PPO||Most expensive, but more provider options||Cheaper than PPO and POS. More expensive than HMO|
|Copays||Copays for physician visits||Copays for physician visits||Copays for physician visits||Copays for physician visits|
|Deductible||Yes, but some plans do not charge deductibles||None with most plans||Yes||Yes|
|Flexibility||Limited. Can only use in-network providers except in emergencies||Yes, though not as flexible as PPO. Can go out of network for additional cost||Yes, flexible. Can go outside of network for additional cost||Limited. Can only use in-network providers except in emergencies|
|PCP (primary care physician)||Required||Required||Not required||Not required|
PPO vs. POS
The ability to see a specialist or to go out of network is easier with a PPO plan. With a POS health insurance plan, you have to designate an in-network primary care physician, who is required to refer you before you can see a specialist. With PPOs, you are not required to select a primary care physician as your main source of care, and you do not have to obtain prior authorization before seeing a specialist inside or outside of the network. This provides a great deal of flexibility with the plans.
Beneficiaries choosing a PPO may like the flexibility of the plans, even though the costs are higher with a PPO. There is also less of an administrative burden with a PPO plan. For example, beneficiaries who go outside of the network with a POS plan are responsible for completing their own paperwork to receive compensation, something not required with a PPO.
HMO vs. POS
HMOs require beneficiaries to see providers within their networks and will not pay for care provided outside of their networks except in emergencies. HMOs also require beneficiaries to choose in-network primary care physicians as their regular source of care, and the primary care physician is responsible for patient care as well as making referrals, features that HMO policies share with POS health insurance plans.
Unlike POS insurance plans, some HMO policies require beneficiaries to live or work within their service areas to be eligible for coverage, which can limit access to the plans. HMOs are known for providing a high level of coordinated, integrated care, attributes that appeal to many beneficiaries. However, this generally allows HMO policies to be cheaper than POS health insurance plans.
EPO vs. POS
An EPO, like an HMO, is a restrictive type of health insurance policy; it only covers services obtained through the provider network except in emergencies. Unlike with HMO and POS plans, beneficiaries covered under an EPO plan are not required to select a primary care physician as their regular source of care. You usually don’t need a referral or prior authorization to see in-network specialists, making EPOs highly attractive for beneficiaries with chronic conditions.
How much does a POS plan cost?
POS health insurance policies may be best for you if you want a plan that provides a middle ground between cost and flexibility.
POS insurance plans are not as cheap as HMO plans. They are, however, cheaper than the more flexible PPO plans — in fact, POS health insurance plans can be 50% cheaper than PPO plans in some cases. With many POS plans, you do not have to meet a deductible. Deductibles are cost-sharing mechanisms, enabling insurers to defray costs while also discouraging the overutilization of services. In many instances, plans that do not charge deductibles will charge higher copays and premiums to recoup the costs of not charging deductibles. POS insurance plans also rely on primary care physicians to manage care and control costs.
POS insurance plans are not as cheap as HMO plans, but they are not as restrictive either, providing a degree of flexibility in that you can go out of network for care but at a higher price. The average monthly cost of a POS health insurance plan for a 40-year-old is $462.
Why choose a POS health plan?
POS health insurance policies represent a middle ground, as they are flexible in some respects and more restrictive in other ways. For example, you have the ability to go out of network but will most likely have to pay a higher price for that coverage.
All of the health insurance policies and provider networks will provide coverage for services. But policies differ in where you can obtain services, which is based on their provider networks. This is why it is always important to review the details of coverage before selecting any plan.
If cost is a major concern, then an HMO or POS is probably one of the better alternatives, assuming, of course, that quality of care is consistent among all the insurance plans. If flexibility is the prime objective — being able to go in and out of the network and to see any provider you want — then a PPO is probably your best choice. If you are looking for a middle ground — moderate costs compared to the other plans and a degree of flexibility in going out of network — then POS health insurance plans probably make the most sense.
Rate information was compiled using Public Use Files (PUFs) published on the Center Medicare and Medicaid website.