Point of Service (POS) Plan Information

A Point of Service plan (also known as a POS plan) is a unique managed care health insurance system. A POS plan combines attributes from both HMOs and PPOs. For example, Point of Service plans have no deductibles and very limited co-payments. A co-payment is an amount paid at the time of treatment to offset a portion of the medical costs. The amount of the co-pay varies depending on the specific medical treatment. Medical office visits have a different co-payment rate than prescriptions and more involved medical treatments.

Like an HMO, POS plans also have a network of physicians, hospitals, and other medical providers, and require members to assign a primary care physician (PCP). A PCP is a member's primary care giver regarding all health-related issues and must refer members to other physicians if a specialist is needed. A member cannot go directly to an in-network specialist without prior approval of the PCP.

Similar to a PPO, Point of Service plans also offer limited coverage to members who choose to go out-of-network for medical care. However, the out-of-network coverage is significantly less than that of in-network coverage, and requires a deductible and co-payment. A deductible is a dollar amount the POS requires a member to pay out-of-pocket before the member can begin to be reimbursed for his/her medical expenses. The deductible amount is normally an annual sum. If within six months of a year a member pays enough out-of-pocket expenses that equate the deductible amount, the POS will

start reimbursing the member for future medical expenses. However, if within a year, the deductible amount is not met, the out-of-pocket expenses do not carry over into the next year. The member's out-of-pocket expenditure amount is set back to zero and the member must start over at the beginning of each year. However, some Point of Service plans have exceptions and offer carry-over deductible features.

Why a Point of Service Plan
POS plans offer more freedom and choices than an HMO. Even if members go out-of-network for their medical needs, they are still covered to a certain degree. HMOs, for example, do not cover members if they go outside of the HMO network of providers. At least with a Point of Service plan, members do get some coverage.

In addition to offering added freedom, POS plans have no deductibles and limited co-payments for in-network coverage. With a PPO, members are required to meet deductibles and pay co-payments. Point of Service plans, on the other hand, have no deductibles and noticeably smaller co-pays.

Why not a Point of Service Plan
Like in a PPO, if Point of Service plan members go out-of-network for their medical care, their coverage is limited and there will be higher out-of-pocket expenses. Visiting an out-of-network provider will also require members to pay a deductible and a much higher co-payment. If their preferred medical care giver is not in their POS plan, POS plan members could end up spending more for their medical needs.

Also, a POS plan requires members to choose a primary care physician (PCP). Even if a specialist is in their POS network, members still need to get approval from their PCP before they visit the specialist, if they want to be covered by their POS plan.

A Point of Service plan is a great choice in medical coverage. It combines benefits from both HMOs and PPOs. But, a POS plan is not the best choice for everyone.

Before you decide on a Point of Service plan, read all the facts. Base you decision on your medical needs and whether or not a POS plan will be able to provide you with the medical care you need.