Health Insurance: What is a Point-of-Service Plan?

A Combination of a HMO and a PPO

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A point-of-service, or POS, plan is a combination of a health maintenance organization (HMO) and a preferred provider organization (PPO).

Typically, point of service plans have a network that functions much like a HMO. First, you pick a primary care doctor, who then manages and coordinates your care within the network. The primary care physician becomes responsible for making recommendations as far as courses of treatment, specialist visits, medications, and more.

Point-of-service plans also allow you to use a provider who is not in the designated network. However, if you choose to go out-of-network for your care, you will pay more as a result. In-network doctors and specialists are favored.

These plans are known as point-of-service plans because each time you need health care (the time or “point” of service), you can decide to stay in the network and allow your primary care physician to manage your care, or you can decide to go outside of the network on your own without a referral from your primary care physician.

HMO

A point-of-service plan has several characteristics of a health maintenance organization, or HMO. If an individual is enrolled in a health maintenance organization, they will likely receive a majority of their care from providers within the network. HMO’s require an individual to select a primary care physician, who is then responsible for managing your health care going forward.

The primary care physician becomes responsible for making recommendations as far as courses of treatment, specialist visits, medications, and more. The primary care physician also provides referrals for any other necessary services within the network. If you do not have a referral from your primary care physician, or you decide to go to a different doctor outside of your health plan’s network, you will most likely have to pay all or most of the cost for that care, as it will not be covered by the HMO.

HMOs usually have small copayments for doctor visits and prescription drugs and no claims to file.

PPO

A point-of-service plan also shares several characteristics with preferred provider organizations, or PPOs. A preferred provider organization is a health plan that has contracts with a wide network of "preferred" providers. You are able to choose your care or service out of the network. Unlike a health maintenance organization, in a PPO you do not need to select a primary care physician and you do not need referrals to see other providers in the network.

If you receive your care from a doctor that is within the preferred network, you will then only be responsible for paying your annual deductable and a typically small copayment for your visit.

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