What is a Point of Service (POS) Health Insurance Plan?
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Point of service (POS) health insurance combines some features of a PPO plan with some from an HMO.
POS health insurance plans allow you to go to doctors that are in-network or out-of-network, just like a PPO.
However, like an HMO, you can only see a specialist after you have a referral from your regular doctor.
POS plans are usually mid-priced, in between the cost of a PPO (more expensive) and an HMO (more affordable).
Differences between POS health insurance networks and other networks
The main differences between POS policies and other types of health insurance plans are in their costs, where you can receive care and if a PCP is required for routine care and referrals to specialists.
These other types of network plans include:
- Preferred provider organization (PPO): A type of health insurance plan where you pay less for using in-network providers. You don’t need to declare a PCP, you cansee specialists without having to obtain a referral, and you can also go outside of the network for care (though you will pay more). These plans provide more flexibility than the other plans, but they are also typically more expensive.
- Health maintenance organization (HMO): This insurance plan 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 PCP as a regular source of care, and 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 | HMO | POS | PPO | EPO |
|---|---|---|---|---|
| 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
PPOs are significantly more flexible than POS plans. With a POS health insurance plan, you have to designate an in-network primary care physician, who you then must ask for a referral to any time you you want to 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 also makes going out-of-network much easier than with a POS plan.
Costs are higher with a PPO plan, but the flexibility you get with it may make it worth it. 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 generally will not pay for care provided outside of their networks except in emergencies. HMOs also require beneficiaries to choose an in-network primary care physician, who will coordinate their care. The PCP is responsible for routinecare 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. They also tend 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 typically not required to select a primary care physician as their regular source of care. You also 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.
Plan type | Monthly cost |
|---|---|
| POS | $462 |
| HMO | $427 |
| EPO | $469 |
| PPO | $517 |
Why choose a POS health plan?
POS health insurance policies represent a middle ground amongst the various plan options. They offer some flexibility, like having the ability to go out of network, but you will most likely have to pay a higher price for that coverage.
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. Otherwise, if you’re okay with 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.
Methodology
Rate information was compiled using Public Use Files (PUFs) published on the Center Medicare and Medicaid website.
Editorial note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.