What is point-of-service (POS) plan

What Is a POS Plan?

A point-of-service (POS) plan is a form of managed-care health insurance plan that offers varying benefits based on whether the policyholder visits in-network or out-of-network healthcare providers.

A POS plan combines characteristics from the two most prominent types of health insurance plans: health maintenance organizations (HMOs) and preferred provider organizations (PPOs). POS plans account for a modest portion of the health insurance industry. Most policyholders have either an HMO or a PPO plan.

KEY TAKEAWAYS

·       Point-of-service (POS) plans often have reduced rates, but their supplier list may be limited.

·       POS plans are similar to health maintenance organizations (HMOs), except they let clients to see providers outside of the network.

·       When visiting an out-of-network provider, a POS insured must complete the necessary papers.

How a Point of Service (POS) Works

A point-of-service plan is comparable to an HMO. If the policyholder wants the coverage to cover the services of a specialist, they must first pick an in-network primary care doctor and acquire recommendations from him or her. A POS plan, like a PPO, covers out-of-network treatments, but the policyholder must pay more than if they utilized in-network services.

However, if the primary care physician refers the policyholder to an out-of-network provider, the POS plan will pay more for the treatment than if the policyholder travels outside the network without one. A POS plan's rates lie in between an HMO's cheap premiums and a PPO's high premiums.

POS plans need the policyholder to make co-payments, however in-network co-payments are typically between $10 and $25 each session. POS plans also do not need deductibles for in-network care, which is a considerable advantage versus PPOs.

POS plans provide countrywide coverage, which is beneficial for patients who travel frequently. One downside of POS plans is that they typically have large out-of-network deductibles. When a deductible is high, patients who utilize out-of-network services must pay the whole cost of care until they hit the plan's deductible. A patient who never utilizes a POS plan's out-of-network services is likely to benefit from an HMO due to cheaper rates.

Important: Point-of-service (POS) plans are frequently less expensive than other policies, although the savings may be restricted to visits to in-network providers.

The disadvantages of POS plans

POS plans combine the best aspects of HMOs and PPOs, although they have a modest market presence. One explanation might be that POS programs are advertised less aggressively than other plans. Pricing may also be a concern. POS plans can be up to 50% less expensive than PPO plans, but premiums can be up to 50% more than HMO rates.

While POS plans are less expensive than PPO plans, plan specifics can be difficult to grasp, rules can be complicated, and many customers are unfamiliar with how the related fees operate. Before selecting whether this is the best alternative, thoroughly review the plan materials and compare them to other options.

Special Considerations

A point-of-service (POS) plan is a form of health insurance plan that offers varying benefits based on whether the policyholder visits in-network or out-of-network healthcare providers.

POS plans are often less expensive than other types of plans, but they may have a considerably smaller network of suppliers. A POS plan allows you to see out-of-network providers, but the fees may be higher, and the policyholder is responsible for completing out all of the paperwork for the appointment. Though POS plans can be up to 50% less expensive than PPO plans, premiums can be up to 50% more than HMO rates.

In some respects, POS plans combine the best aspects of HMO and PPO plans, but you should consider if this type of plan is right for you.