A point-of-service health insurance plan, or POS, operates like a health maintenance organization (HMO), except you have more choices. Unlike in an HMO, you can see a healthcare provider outside your network, but usually at a higher cost.
A POS is a form of managed care with flexibility – a hybrid, or middle ground, between an HMO, where your primary care doctor directs your care, and a preferred provider organization (PPO), where you have more choices. POS plans are usually cheaper than PPO plans but more expensive than HMOs.
Like an HMO, you may need to choose a primary care doctor (you don’t necessarily need one in a PPO). This doctor will make referrals to specialists when you need them.
You may have copayments, coinsurance, and deductibles, usually for out-of-network care. Many POS plans do not have deductibles for in-network care. In-network copays, meanwhile, can run between $10 and $25.
In a POS, your in-network doctor, hospital, pharmacy, and other healthcare providers will have contracts with your insurance plan to provide you with service. Some plans offer a choice of doctors within the network without making you choose a primary care doctor.
But you may need prior authorization from your insurance company for certain drugs, medical equipment, and services. Many preventive services, meanwhile, are covered according to federal law.
These plans aren’t nearly as restrictive as HMOs. You can travel and visit a doctor anywhere and have some level of coverage; in an HMO, you may have to pay the full price for out-of-network care. A POS plan may be useful if you need to go outside your network to see a specialist, particularly for outpatient medical services like counseling.
On the other hand, POS plans can be confusing. Each type of health service may have different deductibles, copays, and restrictions. Your out-of-network deductibles can be very costly, specifically because your insurance plan wants you to seek care with specialists in your network.
Love paperwork? Choose a POS; you’ll have a lot of it for out-of-network care. You may have to pay up front to see that outside specialist, then submit paperwork to your insurance company, asking for reimbursement. You may have to wait a while, up to 3 to 6 months, by some estimates, before you get any money back.
It is very important to understand all of your in-network, and out-of-network, costs before you sign up for a health insurance plan. You should always consider all of your anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health plan.
June 15, 2015
Christopher Nystuen, MD, MBA