The Open Enrollment Period for health insurance is here: November 1 – January 15
Enroll in a new health plan or reevaluate your current coverage to see if it’s still a good fit for you. You can make the following changes during this period:
- Enroll in a health insurance plan for the first time
- Change health insurance plans
- Change your current plan’s dependents
Still have questions? Learn more about the health insurance Open Enrollment Period.
PPO vs. POS: What to Know
Preferred provider organization (PPO) and point-of-service (POS) plans are two of the most commonly available healthcare options in the US. The main difference between PPO and POS plans is how much flexibility members have, but they also differ in terms of cost-sharing requirements and care coordination. Understanding how POS vs. PPO plans work is key for making informed decisions about health coverage.
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How PPOs Work
PPOs are a common type of health insurance plan. Like other plan types, they offer a network of healthcare providers and facilities who have agreed to accept the coverage. However, they offer a greater degree of flexibility than other plan types.
In a PPO, plan members typically pay less when they choose to get care from an in-network or “preferred” provider. Members can see other providers as long as they’re willing to pay the higher out-of-network copay or <a class="wpil_keyword_link" href="https://assurance.com/health-insurance/copays-deductibles-and-coinsurance.
Unlike some other plan types, PPOs do not require members to choose a primary care doctor, nor do they require referrals for specialist care. The tradeoff for this flexibility and convenience is that PPOs have higher premiums than other types of health insurance.
See It In Action
For example, imagine you purchased a PPO plan from the Marketplace with the following in-network costs:
- Premium: $600
- Deductible: $4,000
- Copay: $30 for a visit
- Coinsurance: 20%
- Out-of-pocket maximums: $7500
You pay $600 monthly to keep the coverage active. Then, you pay for the first $4,000 of covered services yourself, with the exception of free preventive care.
The plan charges $30 per visit when you see a primary care doctor or specialist in the network. You can go outside the network, but the copay is higher. In the event of a serious medical issue, after you’ve met your deductible, you pay 20% of the cost of services like an ER visit, surgery, or hospital stay. Once your in-network costs reach $7,500, the plan covers 100% of costs for the rest of the year.
PPOs are one of the most popular types of health insurance due to the many advantages they offer consumers. Some reasons to consider a PPO include:
- Flexibility in provider choices: People with PPOs do not need to choose a primary care doctor to oversee their care. They have the freedom to see specialists, such as cardiologists or dermatologists, without getting a referral.
- Larger provider networks: Some PPO plans have tens of thousands of participating providers across a state, while others are even larger, covering multiple states.
- Out-of-network coverage: PPOs provide some coverage for providers and facilities outside the network, offering more freedom of choice for plan members.
- Comprehensive healthcare package: PPO plans cover an array of medical services and procedures, from preventive care to surgeries. Specific benefits vary from plan to plan.
Despite the popularity of PPO plans, they’re not right for everyone. Some of the potential downsides of enrolling in a PPO plan include:
- Higher monthly premiums: PPOs typically have higher premiums than other types of health insurance. PPOs cost more because they offer larger networks and the flexibility to get out-of-network care.
- Lack of care coordination: PPOs do not require members to choose a doctor to oversee their care, which could result in inconsistent treatment plans or missed preventive care.
- Limited out-of-network coverage: Plans often set separate, higher deductibles for out-of-network care. Members also pay higher coinsurance rates when they use out-of-network providers.
- More paperwork and effort: Consumers who choose to see out-of-network providers may need to submit claims themselves, which is time-consuming for those who use out-of-network providers regularly.
How POS Plans Work
POS plans are less common than PPOs but still widely available: About 10% of people with job-based health coverage are enrolled in a POS, and POS plans are also sold in the Marketplaces. The main difference between PPO and POS plans is that the latter offers less flexibility.
In POS plans, members are required to choose an in-network primary care provider. Their primary doctor is their initial point of service that coordinates all covered care. Members must get a referral from that doctor if they want to see a specialist.
Each POS has a network of doctors, other healthcare providers, and hospitals who contract with the plan. Members pay less when they use network providers, but partial coverage is available for out-of-network services. Depending on the specific plan, members may need referrals to use out-of-network providers.
See It In Action
Here’s what your healthcare costs might look like if you selected a POS plan with the following features:
- Premium: $500
- Deductible: $0
- Copay: $100 per visit
- Coinsurance: 40% for hospital services
- Out-of-pocket maximum: $7500
The $500 premium is the monthly fee you pay in exchange for health coverage. Like many POS plans, this plan has no deductible, which means it starts paying for covered health services right away.
When you see your primary care doctor, you pay $100, and the plan covers the rest. For hospital services like ER visits and surgeries, you pay 40% of the cost, and the plan covers the remainder. The most you’ll spend per year on covered in-network services, not including your premium payments, is $7,500.
Understanding the pros of POS vs. PPO plans helps consumers choose the right plan type for their needs. Some key benefits of POS plans include:
- Care coordination: With a designated primary care physician, consumers have a central point of contact who helps them access the right specialists and navigate the healthcare system.
- Low or no deductible: POS plans typically have no or a fairly low deductible, meaning coverage starts sooner. However, some plans have high deductibles, so confirm the amount before signing up for a plan.
- Out-of-network coverage: Like PPOs, POS plans generally offer some coverage for doctors, hospitals, and other providers outside of the network.
- In-network provider discounts: Plan members enjoy lower cost-sharing requirements when they choose to see a provider in their POS plan’s network.
While a POS plan may be the right choice for some people, it may not be suitable for others. Some reasons why consumers decide against POS plans include:
- Smaller provider networks: Compared to PPOs, POS plans tend to have smaller networks with fewer providers for members to choose from. However, POS network sizes vary from plan to plan.
- Must choose a primary care provider: Members of POS plans select a primary care doctor who is responsible for overseeing their care. Changing primary care providers may be challenging depending on the plan’s rules and network size.
- Referrals needed for specialist care: In POS plans, members who want to see a specialist typically need to ask their primary care doctor for a referral. The need for referrals may delay necessary medical care.
- Limited plan availability: While POS plans are not uncommon, they’re not as widely available as PPOs. Some consumers who want a POS plan will find few to no options in their area.
Putting It All Together
PPO and POS plans are two of the more common types of health insurance plans available to Americans. Both have their own set of features and limitations, and neither is necessarily better than the other.
PPO plans may be a good option for people who do not mind paying higher costs in exchange for the freedom to choose their healthcare providers from a large network. On the other hand, you may prefer a POS plan if you want a low deductible and the guidance of your chosen primary care provider.