Key takeaways:
A point-of-service health care plan, or a POS, is a managed-care health insurance plan that combines elements of health maintenance organization (HMO) and preferred provider organization (PPO) plans.
You often will have copayments with a POS, but no deductible.
POS health plans have in-network doctors like HMOs. If you are treated by a provider who is out of network, you’ll pay more money — possibly upfront — and may have to fill out paperwork to get your costs reimbursed.
If you’re trying to choose a health insurance plan, you may be given the option of a point-of-service (POS) health plan. If you have no idea what that is, you probably aren’t alone.
That’s because while point-of-service plans have been around since the 1990s, they aren’t as well known as preferred provider organization (PPO) or health maintenance organization (HMO) plans. According to a 2022 Kaiser Family Foundation survey, this was the distribution of enrollment among employer-provided health plans:
PPO: 49%
High-deductible health plan (HDHP) with savings option: 29%
HMO: 12%
POS: 9%
Conventional (also known as indemnity or fee-for-service plan): 1%
But even though they’re not widely used, POS plans offer some unique benefits.
What is a point-of-service plan?
A POS plan is a type of managed care health insurance plan. It essentially combines a PPO and an HMO plan. Just as with a PPO and an HMO, you probably will have copayments with a POS. But you often won’t have to meet a deductible.
How does a point-of-service plan work?
In practice, a POS works like many health insurance plans: When you need care, you go to the provider’s office and give the receptionist your insurance card. With a POS, you can use any provider you want, but you’ll pay more if you use physicians, hospitals, and other healthcare providers that are not in your POS plan’s network.
Like an HMO, a POS plan requires your primary care provider (PCP) to refer you to specialists. Your PCP — a family doctor or general practitioner — is that “point of service” where your healthcare begins. And, when needed, your PCP directs you to other medical professionals.
But there are exceptions: You won’t need a referral to see an obstetrician/gynecologist or OB-GYN, though your policy probably will require your OB-GYN to be in-network. Another exception is emergency care: If you see an out-of-network provider at the emergency room or an urgent care center, you will not pay more for that visit.
How is a POS plan different from an HMO or PPO plan?
A POS plan has many similarities to an HMO or PPO, but there are some subtle distinctions, including:
Selecting a specialist: Your PCP needs to recommend specialists, which is similar to how HMO plans work. Like a PPO, you can see specialists and other providers who are out-of-network but you will pay more.
Cost: PPOs tend to have higher premiums and deductibles than HMOs. A POS is generally in the middle of the cost spectrum.
Paperwork: POS plans will coordinate with the healthcare provider for payment, just like HMOs and PPOs. This frees you from high upfront costs and paperwork — but only if you see an in-network provider. Be prepared to pay all costs upfront and wait for reimbursement if you receive out-of-network care with a POS. You also may be responsible for completing forms on your own before receiving reimbursement, which will be a portion of what you paid upfront.
What are the pros and cons of a point-of-service health plan?
Here are some selling points and challenges for you to consider before choosing a POS plan.
| Pros | Cons |
|---|---|
| Lower cost than a PPO: Copays and premiums are sometimes half as much. | Potential for a high cost: If you visit a specialist or other provider outside the network, you will pay more than seeing an in-network provider. |
| More flexibility than an HMO: An HMO won’t pay for services out-of-network. A POS will. | Potential for red tape: If you receive care outside the POS network, it’s likely you will need to pay all costs upfront, and you could find yourself mired in paperwork to get your partial reimbursement. |
| No deductible if you stay in-network: Most point-of-service plans don’t require the patient to meet a deductible. | Potential to pay a deductible for out-of-network care: If you see a provider who is out-of-network, you may be required to meet a deductible. |
| Go to any healthcare provider you want: You’re not limited to a small network of providers, but selecting out-of-network care can cost you more. | More visits or at least calls to your PCP: Typically, you’ll have to get a referral from your PCP if you want to see a specialist. The two exceptions are with OB-GYNs and visits to the emergency room or urgent care. |
Who is an ideal person for a point-of-service plan?
A POS plan may be a good fit for you if:
You have a relationship with a specific physician or specialist. If you really like the idea of POS plans and you also want to see a certain medical provider who is in the POS network, choosing this insurance could be a way to achieve both goals.
You want the flexibility of a PPO plan, but you can’t afford a PPO plan. In that case, a POS plan may be a good fit, but you will want to consider whether it’s worth the hassle if you need out-of-network care.
You have a good rapport with your primary care provider. Every time you need a referral, you will need to go to your regular physician. If you value having a PCP as the gatekeeper of your healthcare and don’t mind waiting on referrals, a POS may work for you.
How do you qualify and apply for a POS?
POS plans are sometimes available from employers offering insurance plans, or you may find them on an Affordable Care Act (ACA) health insurance marketplace. Becoming eligible or applying for a POS is similar to other health insurance plans. You can purchase the plan on your own as well as by working with your employer or an insurance broker.
Medicare Advantage does not offer POS plans, but they do have something close — HMO plans with POS options (HMOPOS). These are HMO plans with POS benefits, such as the ability to get some out-of-network services for a higher copayment or coinsurance.
Are there out-of-pocket costs with a POS plan?
Yes. You’ll pay a premium every month, and it’s likely that you’ll have a copay when you visit a doctor. However, if you see physicians and specialists within your POS plan’s network, you should be able to minimize out-of-pocket costs.
Who should not use a point-of-service health plan?
If you see providers regularly who are not in the POS plan’s network, this type of insurance is probably not the best option for you. That’s because every time you seek care with these providers, you’ll pay more for out-of-network healthcare and likely have to pay the entire bill upfront — and do paperwork to get a partial reimbursement.
The bottom line
A point-of-service plan combines attractive features of the PPO and the HMO. A POS could work for somebody who wants lower out-of-pocket costs than a PPO and more flexibility than an HMO — all without a deductible (under most circumstances) if you stay in-network.
Like most other types of insurance, you’ll have copayments when you receive care under a POS. Visiting specialists requires a referral from your primary care provider. And if you go outside the network for care, be prepared to pay all costs upfront before completing forms for your reimbursement.
Why trust our experts?
References
Healthcare.gov. (n.d.). Point of service (POS) plans.
Kaiser Family Foundation. (2022). Distribution of health plan enrollment for covered workers, by plan type and firm size, 2017 and 2022. 2022 Employer Health Benefits Survey.
Medicare.gov. (n.d.). Health maintenance organization (HMO).
