When shopping for healthcare coverage, it’s easy to feel overwhelmed by the various types of health insurance plans on the market. So many of them have confusing acronyms and seem to offer similar coverage.
What is a point-of-service plan? How does one work, and is one right for you? This article provides answers to common questions regarding point-of-service plans and their use.
What Is a POS Health Plan?
POS plans are called “point-of-service” plans because, at each point in your healthcare journey, you decide whether you want to stay in-network for a healthcare service. Essentially, all your costs with this type of plan depend on the “point of service,” i.e., the medical facility or healthcare provider offering care.
POS health plans aren’t as well known as their alternatives, but they are managed care plans that essentially combine aspects of both HMO and PPO plans.
PPO plans, or preferred provider organization plans, offer a specific network of providers covered under a healthcare plan. The approved providers within the network have agreed to provide healthcare services to plan members at specified rates. These plans typically come with higher premiums because they offer more flexible benefits, like receiving care from out-of-network providers.
Health management organization (HMO) plans also offer a specific network of providers like PPO and POS plans. However, they’re more restrictive, often requiring you to work with providers and organizations within a particular network. This is just one of the many differences between PPOs and HMOs.
How a Point-of-Service Health Plan Works
POS plans are similar to HMOs in that they offer lower costs when using doctors, providers, and hospitals that are part of the plan’s network. They’re similar to PPOs in that they offer coverage for out-of-network providers, but you have to pay more or get a referral from your primary care doctor to make use of them.
Pros of a POS Plan
POS plans can offer many advantages, depending on your situation and needs. Here are a few of the most notable.
If your primary care doctor makes a referral to an out-of-network specialist, the POS plan will pay more than if you sought out the specialist without a referral.
Of course, you can pursue care from an out-of-network provider with a POS plan, but you’ll have to pay out of pocket, then file a reimbursement claim after the fact.
Lower Costs and Lower Copays
Premiums for POS plans are like a middle ground between the lower rates offered by HMO plans and the higher premiums required for PPO plans.
Point-of-service health plans work by requiring copayments at doctors’ visits, though these average between $10 and $25 per appointment. Most don’t have deductibles for services that are in-network, whereas PPOs do.
Better Geographical Coverage
POS plans come with nationwide coverage. This is particularly beneficial for policyholders who travel frequently. You may find a provider within your care network while outside your home state, and you can receive care and file a claim for reimbursement if unable to locate a network provider that will file on your behalf.
Enhanced Care Flexibility
POS plans tend to offer more flexibility when it comes to choosing doctors, especially compared to HMOs.
Cons of a POS Plan
While POS plans come with many benefits, they still have some disadvantages.
High Deductibles for Out-of-Network Coverage
One major disadvantage of POS plans is that their deductibles for out-of-network care tend to be quite high. This means the policyholder must pay the full covered charge(s) until their deductible is reached.
If you never need out-of-network services, you’re likely better off going with an HMO over a POS plan because of the lower premiums. HMO plans do not cover out-of-network services, except in the event of an emergency; so although out-of-network services may cost more on a POS plan compared to in-network services, they will still be covered per the plan’s benefits as opposed to not being covered at all as in the case of an HMO plan.
Since POS plans are less common than PPOs or HMOs, their policies can be more confusing. For this reason, it can be difficult to estimate how much you need to pay when visiting a specialist or doctor, potentially leading to unwelcome surprises and financial complications come billing time.
Using a POS plan involves a lot of paperwork when you see an out-of-network healthcare provider. If you want a reimbursement after seeing the provider, you must file a claim and wait to be approved.
How to Know Whether a POS Plan Is Right for You
The reason there are so many different healthcare plans out there is that different plans are better suited for different people.
If your highest priority is saving money and cutting costs, and you don’t anticipate requiring services from out-of-network doctors or specialists, a POS healthcare plan might be right for you.
A POS plan may be a good option for you if:
You’re comfortable coordinating your healthcare through a primary care physician
You have a preferred doctor who participates in the POS network
You know the ins and outs of the process, such as how to do the paperwork, file reimbursement claims, and navigate referrals
You don’t want to pay for high premiums, such as those associated with PPO plans
You don’t have special needs, such as chronic conditions that require healthcare management or regular visits to a specialist
If saving money on healthcare costs is among your primary goals and you don’t require care from a specialist, a POS plan may be a solid option.
How to Get POS Health Insurance Coverage
A great way to get started with a POS health plan is to search for coverage options through your state’s marketplace. You can also search online health insurance provider platforms.
These platforms provide tools that allow you to compare different plans, both POS and otherwise. They also map out the costs of monthly premiums for various plans and can tell you more about what type of coverage you’ll receive.
Final Thoughts on POS Health Plans
POS health plans are a great option for many people. Specifically, they’re ideal for those who want lower premiums and copays and don’t need specialized care but still want some flexibility when choosing providers. If that describes you, you can’t go wrong with a POS plan.