Point-of-Service (POS) Plans

A Point-of-Service (POS) plan directs members to select a primary care physician from a list of participating providers, like in an HMO. All medical care is directed by this physician, known as the “point of service.” The POS physician will also normally refer members to other in-network physicians if there is a need for a specialist. These specialists comprise a broad base of medical providers in the network, which typically covers a wide geographic area.

With a POS plan, the member is required to complete paperwork themselves and submit claims for reimbursement from the insurance company. The percentage the insurance company pays for out-of-network charges is lower. In a POS plan, the member has greater freedom to see out-of-network providers than with an HMO. At the same time, visiting an out-of-network provider will cost extra.

Advantages of POS Plans

Disadvantages of POS Plans

Network Flexibility
POS coverage allows you to maximize your freedom of choice. Like a PPO, you can mix the types of care you receive. For example, your child could continue to see his pediatrician who is not in the network, while you receive the rest of your healthcare from network providers. This freedom of choice encourages you to use network providers but does not require it, as with HMO coverage.

Higher Out-of-Network Co-Payments
As in a PPO, there is generally strong financial incentive to use POS network physicians. For example, your co-payment may be only $10 for care obtained from network physicians, but you could be responsible for up to 40% of the cost of treatment provided by non-network doctors. Thus, if your longtime family doctor is outside of the POS network, you may choose to continue seeing her, but it will cost you more.

Lower In-Network Co-Payments
As with HMO coverage, you pay only a nominal amount for network care. Usually, your co-payment is around $10 per treatment or office visit. Unlike HMO coverage, however, you always retain the right to seek care outside the network at a lower level of coverage.

Out-of-Network Deductible
In most cases, you must reach a specified deductible before coverage begins on out-of-network care. On average, individual deductibles are around $300 per year, and the average annual family deductible is about $600. This deductible amount is in addition to the co-payment for out-of-network care.

No In-Network Deductible
When you choose to use network providers, there is generally no deductible. Thus, coverage begins from the first dollar you spend as long as you stay within the POS network of physicians.

Referrals Needed
As in an HMO, you must choose a primary care physician (PCP). Your PCP provides your general medical care and must be consulted before you seek care from another doctor or specialist within the network. This screening process helps to reduce costs both for the POS and for POS members, but it can also lead to complications if your PCP doesn't provide the referral you need.

Annual Out-of-Pocket Limit
Healthcare costs paid out of your own pocket (i.e., deductibles and co-payments) are typically limited. The average yearly limit for individuals is around $2,400. For families, the average yearly limit is approximately $4,000.

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