What Is POS Health Insurance?

A POS health plan, short for Point-of-Service, is a type of health insurance that offers a mix of HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) features.

Like with an HMO, policyholders need to designate a primary care provider (PCP) and generally require referrals to see specialists. And like PPOs, POS plans allow out-of-network care. They are usually mid-level in terms of cost — cheaper than PPOs but more expensive than HMOs.

Selecting a POS plan involves weighing the inconvenience of needing referrals against the increased flexibility of out-of-network care.

Point-of-Service (POS) is a type of managed health insurance plan in which members must select a primary care physician (PCP), who becomes the central figure in managing their health care.

A distinctive feature of POS plans is the combination of structured in-network care with the option of seeking out-of-network treatment. POS plans balance the cost savings and network restrictions of HMOs and the provider flexibility of PPOs.

POS and PPO plans are distinct types of health insurance plans, each with unique features. POS plans combine elements of both PPOs and HMOs. For example, you must select a primary care physician (PCP) who coordinates your health care and provides referrals for specialists, like with an HMO. However, they are similar to PPOs in that while in-network services are more cost-effective, you have the option to go outside the network for care, typically at a higher cost.

PPO plans offer greater flexibility as they don't require you to choose a PCP or get referrals for specialists. This freedom allows direct access to health care providers, whether in-network or out-of-network. However, this convenience usually comes with higher premiums and out-of-pocket expenses.

Importantly, while POS plans generally have lower premiums than PPO plans, POS plan premiums can be similar to those of PPO plans in certain cases. This can depend on various factors such as the specific benefits offered, the insurer, the plan's coverage network and the geographic location of the policyholder.

POS and HMO plans differ in network flexibility and cost. POS plans offer more flexibility by allowing visits to out-of-network providers, albeit at a higher cost. HMO plans, in contrast, restrict members to a network of doctors and hospitals and typically do not cover out-of-network care except in emergencies.

Cost-wise, HMOs are one of the most affordable health plans. They typically feature lower premiums and out-of-pocket expenses, focusing on preventive care within a confined network. Meanwhile, POS plans tend to have higher premiums. However, both require choosing a primary care physician (PCP) for coordinated care and specialist referrals.

This makes POS plans a middle ground between the strict network limitations of HMOs and the broader options of other plan types.

A POS plan works by blending structured, in-network health care management with the option to seek out-of-network services. Here are the main features of POS plans:

Choosing a primary care physician is required for a POS plan. The PCP is important for providing referrals to specialists and coordinating care within the network.

POS plans contract with a network of health care providers, ensuring in-network services are provided at discounted rates. Members benefit from low co-payments for in-network visits, typically between $10 and $25. Typically, there are no deductibles for these in-network services, which is a significant financial advantage over other types of plans like PPOs and makes routine and preventive care within the network more budget-friendly.

While POS plans allow access to out-of-network providers, the coverage is less comprehensive than for in-network services. The insurance company pays a smaller portion of out-of-network bills, leading to higher out-of-pocket expenses, including potential deductibles and higher copays.

An important aspect of POS plans is the coverage for emergency care. In cases of emergency, the plan provides a high level of coverage regardless of whether the facility is in network or out of network.

For specialty care, POS plan members need to obtain a referral from their PCP. This process is required to access specialists like dermatologists, cardiologists or physical therapists.

When considering POS health insurance, you are likely to have questions about this plan type. MoneyGeek has addressed common queries to help you understand how POS plans work and whether they are right for your health care needs.