What Is a Point of Service (POS) Health Insurance Plan?

A Point of Service (POS) health insurance plan blends characteristics of both Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). This hybrid structure offers individuals a choice between utilizing in-network providers or seeking care from out-of-network providers. Opting for out-of-network services typically comes with different financial implications.

Defining Features

A POS plan requires members to select a primary care physician (PCP) from within its network. This PCP serves as a central point for coordinating all healthcare needs, including preventive care, managing chronic conditions, and diagnosing common medical issues. The PCP plays a significant role in guiding the member’s medical journey, acting as a gatekeeper for specialized services.

For a member to see a specialist or receive other services within the plan’s network, a referral from the chosen PCP is generally required. This referral system ensures that care is coordinated and often helps in managing costs by directing patients to appropriate in-network providers.

Cost Components

Understanding the financial obligations associated with a POS health insurance plan involves several cost components. Premiums represent the regular payments, typically made monthly, to maintain health coverage.

Deductibles are the amounts an individual must pay for covered healthcare services before the insurance plan begins to share costs. In a POS plan, deductibles often differ significantly between in-network and out-of-network care, with out-of-network deductibles typically being higher. For example, a plan might have a $1,000 deductible for in-network services. Payments made towards an in-network deductible generally do not count towards an out-of-network deductible.

Copayments, or copays, are fixed amounts paid for specific covered services, often at the time of service, such as an office visit or prescription refill. These amounts can vary by service type; for example, an in-network doctor’s visit might have a $20 copay, while an emergency room visit could be $100. Coinsurance is the percentage of costs an individual pays for covered services after the deductible has been met. If a plan has 20% coinsurance, the insurance company pays 80% of the cost, and the member pays the remaining 20%, which can also differ for in-network versus out-of-network care.

An out-of-pocket maximum sets an annual limit on the amount a member will pay for covered healthcare expenses. Once this maximum is reached, the insurance company typically covers 100% of additional covered services for the remainder of the plan period. It is common for POS plans to have separate out-of-pocket maximums for in-network and out-of-network care.

Provider Network Access

Accessing care through a POS plan involves navigating its provider network, which directly impacts costs and convenience. When members receive care from providers within the plan’s designated network, they benefit from lower out-of-pocket costs due to pre-negotiated rates between the insurance company and the providers. In-network providers typically handle direct billing to the insurance plan, simplifying the payment process for the member, who usually only pays their predetermined copay or deductible at the time of service. While in-network care often requires a PCP referral for specialists, this process streamlines coordinated care and keeps costs lower.

Conversely, choosing to seek care from providers outside the plan’s network is an option with a POS plan, similar to a PPO, but it comes with higher financial responsibility for the member. Out-of-network services generally incur higher deductibles, increased coinsurance percentages, and potentially higher overall out-of-pocket expenses. Members are frequently required to pay for out-of-network services upfront and then submit claims to their insurance company for reimbursement. The reimbursement amount for out-of-network care is typically less than for in-network services, potentially leaving the member responsible for the balance of the billed charges.

In emergency situations, POS plans generally handle coverage differently, often providing in-network benefits even if the facility or provider is outside the plan’s usual network. Federal regulations often prohibit insurance companies from charging more for emergency room services at an out-of-network hospital compared to an in-network one.