What Is POS Insurance?
POS stands for point-of-service and is a health insurance plan type that combines elements of HMO insurance plans and PPO insurance plans, which are the two most popular insurance types. However, its main defining feature is that many POS plans do not have deductibles that patients must meet before their insurance kicks in. The result is a plan with more flexibility than an HMO, but lower costs than a PPO.
POS insurance can be a good choice if you want some flexibility in choosing your healthcare providers, but also want the cost savings and other benefits of in-network care.
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Understanding the Point-of-Service (POS) Plan
A POS is a type of health insurance plan and so plays much the same role as a preferred provider organization (PPO), health maintenance organization (HMO), or exclusive provider organization (EPO). However, POS plans occupy the space between HMO and PPO plans.
Key Features of a POS
- No deductibles to meet
- Flexibility in choosing your preferred health care providers
- Referral needed to see specialists
- Reduced cost for in-network care
- Coverage for out-of-network care
Patients with POS insurance can go outside their healthcare network for care and have part of the cost covered, though there are restrictions and limitations on how reimbursement may work for out-of-network care. You must also have designated primary care physicians in a POS.
Point-of-service plans also stand out because deductibles for these plans are less common, meaning patients may be able to access care without paying a specific amount upfront. For this feature, premiums may be comparable to or higher than PPO plans, but depending on your healthcare needs, not having a deductible may make your care costs more affordable in the long run.
POS Insurance vs. Other Insurance Types
|Average network size||Variable||Large||Moderate||Large|
|Designated primary care physician||Required||Not required||Required||Not required|
|Referrals to seek specialist care||Required||Not required||Required||Required|
|Out-of-network care coverage||Yes, with limitations||Yes, partially covered||Not covered||Medical emergencies only|
In addition to POS plans, other frequently encountered types of health insurance are preferred provider organizations (PPOs), health maintenance organizations (HMOs), and exclusive provider organizations (EPOs). Each comes with its own benefits and drawbacks. Depending on your healthcare history, current health, and overall financial situation, you may find that one type of plan offers a better mix of affordability and coverage.
POS Insurance vs. PPO Insurance
|Average network size||Variable||Large|
|Designated primary care physician||Required||Not required|
|Referrals to seek specialist care||Required||Not required|
|Out-of-network care coverage||Yes, with limitations||Yes, partially covered|
PPO plans are one of the most popular types of plans available, and for that reason also enjoys the largest network of providers. This means those with PPO plans generally have more options differ from POS plans because there is generally no requirement to select a primary care physician, and there is always a deductible that policyholders must meet before their insurance begins to share costs. PPO plans also generally do not need referrals for specialist care, though this is not always the case.
However, this flexibility, freedom, and network size comes with a cost: PPO premiums are usually one of the highest of all the health insurance types, though POS premiums can be comparable or higher.
Which Should You Pick: POS or PPO?
If your priority is the flexibility of care and a larger healthcare network, and you can afford both a deductible and a higher monthly premium, a PPO plan may make sense. But those looking for the ability to go out of network on rare occasions, but prefer no deductible may find a POS plan a better fit.
POS Insurance vs. HMO Insurance
|Average network size||Variable||Moderate|
|Designated primary care physician||Required||Required|
|Referrals to seek specialist care||Required||Required|
|Out-of-network care coverage||Yes, with limitations||Not covered|
HMOs are often described as budget-friendly because they come with lower deductibles than PPOs and lower premiums than POS and PPO plans. Like with a POS plan, policyholders in an HMO select a primary care physician who is the primary point of contact for all medical care. This means that along with regular checkups, they furnish the required referrals to see specialists.
However, unlike POS plans, HMO insurance does not offer any coverage for out-of-network services except in medical emergencies. This is typically defined as urgent medical care that addresses a life-threatening condition.
Which Should You Pick: POS or HMO?
Those without significant health concerns or recurring medical needs may find an HMO plan a good choice to keep costs down. However, if your health needs are more varied or require specialist care, it may be worth investing in a POS plan to access out-of-network coverage as needed.
POS Insurance vs. EPO Insurance
|Average network size||Variable||Large|
|Designated primary care physician||Required||Not required|
|Referrals to seek specialist care||Required||Required|
|Out-of-network care coverage||Yes, with limitations||Medical emergencies only|
EPO insurance is generally less expensive than POS and PPO insurance, but it is more costly than HMO insurance. What sets EPO plans apart is their large in-network provider base; often, EPOs have networks that span multiple states or the entire country, making it easier to access in-network care.
The tradeoff for this larger network is that out-of-network care is typically only authorized in medical emergencies. This means if you go to a specialist who is not in your EPO’s network, you would be responsible for paying 100% of those costs.
Which Should You Pick: POS or EPO?
If you’re looking to manage costs and your preferred healthcare providers are within the network, choosing an EPO plan could be a cost-effective choice. This option would also suit those who travel often, as an EPO’s wide network minimizes your need to go out of network for services, reducing the likelihood that you would be affected by EPO plans’ lack of out-of-network coverage.
On the other hand, a POS plan may be a more suitable option if you live in an area where a higher number of healthcare providers are out of network, or have recurring health needs that make a POS plan’s lack of deductible a boon to keeping your costs down.
Your Care Network With POS Insurance
Health insurance plans give policyholders access to medical care at a reduced cost compared to what you would pay out of pocket if you were uninsured, as long as you use services and healthcare providers that are covered within your plan’s network.
POS plan networks provide a variety of healthcare providers, including specialists, pharmacies, and healthcare facilities such as hospitals. As long as you receive care from within this network of providers, you would only pay your policy’s copays and coinsurance rates for each visit and procedure.
Why Is In-network Care Cheaper?
Health insurance plans rely on provider networks. These networks may include primary care physicians, specialists, and outpatient care providers. Insurance companies establish these networks by negotiating agreements with providers, which allows policyholders to access care services at a lower cost.
The tradeoff for this potentially lower cost is if patients go outside the health network, the insurance company may not cover any of the services provided. For example, policyholders covered under an POS must select a primary care physician from within the POS’s healthcare network and obtain a referral if they’re looking for specialist care. Without this referral, the costs of a specialist visit may not be covered.
How POS Insurance Claims Are Processed
Most POS plans allow you to access out-of-network care, but come with additional costs depending on your plan details. In addition, many POS insurance plans require you to pay the full cost of care out of pocket for any out-of-network services you receive, and then manage claims and paperwork for reimbursement afterwards.
This means that though your POS plan may provide coverage, you are ultimately responsible for filing the claim. Typically, the process looks like this:
- You seek care from an out-of-network provider, such as a specialist who is closer to you but not within your plan’s network.
- You pay for all the fees and costs upfront, as if you did not have insurance coverage.
- After receiving care and getting a bill or receipt for the care, you contact your POS insurance company to begin the claims process.
- You complete the insurer’s claims forms, being sure to include all necessary accompanying details and paperwork.
- You await the insurance company’s decision on whether your claim will be approved or denied.
- If approved, you will receive reimbursement through a check. If denied, you may reach out to your insurance company for more information on the reasoning behind the rejection.
This makes seeking coverage for out-of-network care with a POS plan more rigorous than that of a PPO plan, which also has out-of-network benefits. With a PPO plan, paperwork and claims submission is typically completed automatically without needing your initiative to kick off the process.
How to Find In-network Care
To find an in-network healthcare provider for your POS insurance, such as a primary care physician, specialist, hospital, or pharmacy, look into these options:
- Check your insurance company’s directory of providers. You can typically access a directory on your insurance company’s website that will list all of the doctors, hospitals, and other healthcare providers that are part of your insurance plan’s network, along with their contact information and locations. You may need to create an account and enter your insurance information, such as your member ID, to access this.
- Contact your insurance company for help. If you’re having a hard time finding an in-network doctor that meets your needs, you can call your insurance company’s customer care phone number for help. A representative may be able to assist you in finding someone in your area that accepts your insurance.
- Ask your current in-network provider for referrals. If you already have an in-network primary care physician, they may be able to provide recommendations for other in-network providers and facilities that offer the services you need.
The Costs of a POS Plan
There are 5 general costs of a POS plan: premiums, deductibles, copayments, coinsurance, and your out-of-pocket maximum.
- Premium: Premiums are the amount you pay every month for health insurance to keep your coverage active. In general, POS plans fall around the same price range as PPOs when it comes to premium costs. You pay a premium each month regardless of whether or not you access healthcare services.
- Deductible: This cost is less common in POS health plans compared to PPOs and HMOs, and usually only applies to when you seek out-of-network care. A deductible is the amount you pay before your insurance plan begins covering healthcare costs. For example, if you have a $2,000 deductible for out-of-network care, you’re responsible for covering the first $2,000 worth of services each year whenever you see someone outside of your POS network. Once your deductible is paid, your insurer would begin paying for your covered benefits.
- Copayments: Copayments refer to upfront flat fees for service. For example, you might have a copayment of $10 for a primary care physician office visit, which you would pay every time you went to see them for an appointment.
- Coinsurance: Coinsurance refers to the percentage amounts covered by you and your insurer for healthcare. For example, if your coinsurance rate is 20%, then you would pay for 20% of the cost of a covered service, and your insurer would cover the remaining 80%.
- Out-of-pocket maximum: Many health insurance plans have an annual out-of-pocket maximum for covered services, which is a limit to how much you would be expected to pay each policy term. For example, if your out-of-pocket maximum is $5,000, your insurer would cover all costs completely after you have paid that amount.
Some POS plans also have higher coinsurance or copayment fees for out-of-network care. For example, your coinsurance for in-network providers might be 20%, but could be 40% for services from specialists, hospitals, or doctors outside of your network.
See It in Action
Here is an example of these costs in action if your plan had the following costs:
- Premium: $500 per month
- Deductible: None for in-network care; $3,000 per year for out-of-network care
- Copay: $10 per appointment
- Coinsurance: 20% for outpatient surgery; 40% for out-of-network outpatient surgery
- Out-of-pocket maximum: $5,000
This means that you pay $500 per month whether you use your plan or not.
When you do go to the doctor or receive any kind of in-network medical treatment, you pay a $10 copayment. You would also pay for 20% of the procedure’s cost while your insurer would pay for the remaining 80% of the cost.
If you go to an out-of-network specialist at some point, you must pay $3,000 in applicable health costs for the year before your insurer will cover any of those out-of-network costs.
Then, if your covered medical procedures end up costing you more than $5,000 — not including your premiums, copays, or out-of-network deductible — you would only pay up to that amount and any remainder would be covered by your health insurance.
Advantages and Drawbacks of POS Insurance
To evaluate whether a POS insurance plan is suitable for your needs, weigh the benefits and drawbacks of this type of insurance.
Advantages of POS Insurance
- Flexibility in choosing healthcare providers: POS plans allow you to choose your healthcare providers, including out-of-network providers. This gives you the flexibility to see a specialist or use a healthcare facility that may not be available under a POS plan.
- No deductible: As long as you stick with your network’s providers, many POS plans do not require you to pay for covered services out of pocket before your insurance kicks in. This can help make your care more affordable in the long run.
- Lower out-of-pocket costs: POS plans typically have lower out-of-pocket costs than PPO plans. This is because POS plans require you to choose a primary care physician who can coordinate your care and make referrals to specialists when necessary. This helps to control costs to the insurance company by minimizing unnecessary treatments and tests, which in turn results in lower costs for policyholders.
- Care coordination: The primary care physician requirement in POS plans ensures that you receive coordinated care, with your physician acting as a gatekeeper to specialty care. This can result in better healthcare outcomes and can help patients avoid unnecessary treatments and tests.
- Reduced cost for in-network care: POS plans have discounted rates for medical care received from in-network providers.
- Out-of-network coverage: Seeing an out-of-network healthcare provider will result in higher costs, but POS plans permit the use of out-of-network services and specialists, and will still cover some of the cost. This can be beneficial for individuals who live in areas where there are limited in-network providers or who need specialized care that is only available from an out-of-network provider.
Drawbacks of POS Insurance
- Out-of-network paperwork is your responsibility: For care received out-of-network, all paperwork, receipts, and bill payments are the responsibility of the policyholder. POS policyholders would need to submit a claim to their insurer for out-of-network coverage.
- Limited network: While POS plans offer more flexibility than HMOs, they have smaller provider networks than PPO plans. This can limit your options for healthcare providers, particularly if you live in a rural area or have specialized healthcare needs.
- Limitations to out-of-network care: While POS plans do offer access to out-of-network providers, they may not cover all services provided by these providers and you are typically responsible for a higher portion of those costs, even after reimbursement.
- Specialist visits require referral: Specialist visits require a referral from your primary care physician, which could slow down the process as you would need to see them first before you can schedule an appointment with a specialist.
- More complex responsibility for the patients: POS plans can be more administratively complex than other types of health insurance plans. For example, you may need to keep track of your primary care physician’s referrals and coordinate with multiple healthcare providers to receive care.
How to Choose the Right POS Insurance Plan
When considering a POS health insurance plan, evaluate your current provider network, the overall costs of POS insurance, and how it compares to other insurance plans.
What to Consider When Evaluating a POS Plan
- Does the POS network include your preferred doctors, clinics, and pharmacies? One of the most important factors to consider when choosing a POS plan is the size of the provider network, especially as POS network sizes already tend to be smaller. Determine if your preferred healthcare providers are in the plan’s network and whether the network is large enough to provide adequate coverage.
- What are the overall costs of this plan? POS plans typically do not have a deductible that you must meet before your insurance cost sharing begins, but they still have premiums, copays, and coinsurance. Review the plan’s costs to determine if it is affordable and appropriate for your healthcare needs.
- What are the out-of-network costs? If it is likely that you will need out-of-network care at some point, review the POS plan’s out-of-network deductible, coverages, and costs.
- What is the coverage for your specific healthcare needs? POS plans may have coverage limits or exclusions for certain services or treatments. Review the plan’s coverage limits and exclusions to determine if it will provide adequate coverage. Be sure to check if the plan also covers any medications you need to take.
- What are the specific plan features? Take a close look at the different aspects of the POS plan, such as whether there are any restrictions or limits on what the plan covers, and if it includes benefits for staying healthy or preventing illness.
- What is the overall reputation of the insurance company? Look into how the insurance company providing the POS plan is viewed in the public eye. Delve into its financial stability, how they treat their customers, and how happy people are with their services.
- When can you enroll? Make sure to know when you can sign up for the POS plan. If you need coverage soon after starting a new job and you’re comparing your employer’s PPO plan to an individual POS plan from the health insurance Marketplace, keep in mind that you can sign up for your employer’s plan immediately, but you might have to wait until the next Open Enrollment Period to sign up for an individual Marketplace plan.
How to Compare Your POS Options
- Make a comparison chart or table of your options. Create a table or spreadsheet that compares your plan options, taking into account the factors mentioned earlier. This will allow you to easily compare and contrast the different plans.
- Prioritize what matters to you the most. Make a note of which factors matter to you the most so that you can prioritize those when comparing the plans. For example, if you value having access to your preferred doctors, the insurer’s reputation, and the overall cost of care, make sure to focus on those factors first.
- Consider your current and anticipated care needs. Consider your current and future healthcare needs when evaluating the plans. If you have upcoming medical appointments or procedures, make sure to look for plans that offer the necessary coverage. For instance, if you plan to see an podiatrist to address recurring foot pain, it’s crucial to select a plan that provides adequate coverage for that specialty and any equipment that may be needed.
- Narrow your options. After considering your needs and priorities, narrow down your options to the plans that best meet those criteria.
- If you are still stuck, ask for advice. If you’re still unsure about which plan to choose, do not hesitate to seek advice. You can consult a trusted healthcare provider or an insurance agent to help you determine which POS plan is the best fit for your unique healthcare needs.
Putting It All Together
POS plans can be a good option for those who want the flexibility to choose their healthcare providers and hospitals, but without having to meet a deductible before insurance kicks in to help cover costs. This can make your overall health care costs more affordable in the long run.
However, POS plans tend to have small network sizes and high premiums to offset the lack of deductible and freedom of in-network and out-of-network coverage. They also require more coordination on the policyholder’s part, such as handling claims for reimbursement if they seek out-of-network care. It’s important to evaluate the benefits of different health insurance plans and compare them to find the best match for your specific needs and financial situation.