UPDATED: Sep 10, 2013
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A POS, or “point of service,” plan is a hybrid of an HMO and PPO. Under this type of plan, you are free to pursue care through any healthcare provider you wish, but the benefit level you receive will vary depending on whether that provider is inside or outside of your network. POS plans are growing in popularity among individual consumers and through employers. Their flexibility makes them attractive, and they can be quite affordable.
In general, a POS plan will cost a little less than a PPO policy with the same level of benefits. The POS plan will likely be somewhat more expensive than an HMO, but the flexibility provided by the POS will make it the more attractive option for many consumers.
How Does Point of Service Work?
Like an HMO, a point of service plan requires you to designate a primary care physician, or PCP. This physician will be your primary contact when receiving any medical care, and he or she will be responsible for referring you to specialists. Unlike an HMO, however, you may still receive care from a doctor who is not your PCP. Your insurance will pay for this care, but the benefits level will be lower than if you had stayed within your network.
In general, care given by the PCP is not subject to a healthcare deductible. Preventative care is usually fully covered by the plan as well. Outside of these expenses, you will typically need to pay a co-payment and co-insurance up to the agreed-upon annual out-of-pocket maximum. There will also be an annual deductible associated with the policy.
Pros and Cons of POS Plans
In some ways, a point of service plan offers the “best of both worlds” between HMOs and PPOs. You get the flexibility to pursue care from any provider you wish, but you can also enjoy the benefits of having a primary care physician. If you don’t mind coordinating care through your PCP, this type of policy can be an excellent choice. It’s also a good option if your existing doctor is already part of the POS provider’s network.
The down side of a POS plan is that you will usually have higher out-of-pocket expenses than you would through an HMO. Your premiums may also be higher. As with all other insurance types, you will not receive the same level of benefits from a doctor outside of your network, but the freedom to pursue an out-of-network doctor is still something many patients find very valuable.
Depending on your needs and budget, a POS might be the right choice for you. It’s important to do your research and find an insurance provider with a network that will encompass the healthcare providers you want to use. It’s also a good idea to compare costs and find the right balance between monthly premiums and annual out-of-pocket limits. Many people with POS plans find that a health savings account is a good way to cover the cost of out-of-pocket medical expenses, so this may be something worth investigating when purchasing your own POS plan.