What is a POS Plan in Health Insurance?
Health insurance can be complicated, but knowing your options is key to choosing the best plan for your needs. One lesser-known but valuable option is the Point-of-Service (POS) plan. These plans combine elements of both HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans.
While POS plans aren’t as widely offered as other types, they provide a useful blend of structure and flexibility. Before we dive into the details of how a POS plan works, it’s helpful to understand the basics of an HMO plan.
What is an HMO Plan?
An HMO plan is a type of health insurance that relies on a network of approved doctors, specialists, and hospitals. With an HMO, you’re required to:
- Select a Primary Care Physician (PCP) to manage your overall health.
- Get a referral from your PCP before seeing a specialist.
- Receive care within the network to be covered—out-of-network care is typically not covered, except in emergencies.
Because of these limitations, HMO plans generally offer lower monthly premiums and out-of-pocket costs. They’re ideal for individuals and families who are comfortable with a more structured approach to healthcare and want to keep expenses low.
What is a POS Plan and What Are Its Benefits?
A POS plan is best described as a flexible version of an HMO. Like an HMO, you choose a PCP and typically need referrals for specialist visits. However, unlike an HMO, POS plans provide limited coverage for out-of-network care.
Key features of a POS plan:
- A primary care doctor coordinates your care.
- Referrals are needed to see specialists.
- You can get care in-network (lower cost) or out-of-network (higher cost).
- Your specific network of covered providers will vary by insurance company.
This hybrid model gives you greater access to specialists or providers outside of your network—ideal if you travel often or need access to more healthcare options. But it also allows you to save money by sticking with in-network providers when possible.
What Are Your Expected Costs on a POS Plan?
Like all insurance plans, POS plans involve a combination of monthly premiums, deductibles, and copays.
- According to a Forbes article, the average monthly cost for a POS plan is $613.
- In many cases, monthly premiums make up the largest portion of your total annual healthcare spending.
- In-network costs are usually low, with reduced deductibles and copays.
- Out-of-network care can be significantly more expensive and may include higher deductibles, coinsurance, or balance billing.
POS plans offer good value if you primarily use in-network care but want the option to go out-of-network when necessary.
Do I Need a Referral for a Specialist on a POS Plan?
Yes, referrals are usually required under a POS plan—just like with an HMO. You’ll need to see your PCP first, who can refer you to a specialist if needed. This helps keep your care organized and ensures you’re receiving appropriate, cost-effective treatment.
What Are the Advantages of a POS Plan?
There are many reasons that people choose a POS plan, including:
- Lower costs for in-network care
- More out-of-network access than a traditional HMO
- Referral system helps ensure care is coordinated and necessary
- Nationwide provider access—a great feature for people who travel
- Low deductibles in many plans, with predictable costs
- Flexible care options, giving you freedom when you need it
For some, the higher up-front cost is worth the reduced annual costs and out-of-network flexibility.
What Are the Disadvantages of a POS Plan?
While advantageous, POS plans are not perfect. You may consider other plans if you do not prefer:
- Referrals required for specialist visits
- Higher premiums than standard HMO plans
- Confusing cost-predictability due to the differences in cost for in-network care vs out-of-network
While POS plans offer more freedom than HMOs, they also come with more complexity, especially around billing and coverage outside your network.
Why Do HMO and POS Plans Use a Primary Care Physician?
The Primary Care Physician (PCP) is central to both HMO and POS plans. They act as your first point of contact and help manage your overall health.
PCPs help provide preventive care like screenings and check-ups, manage chronic conditions, diagnose and treat common illnesses, and coordinate specialist and hospital care.
This system ensures your care is organized, efficient, and cost-effective. While needing a referral might seem inconvenient, it helps prevent unnecessary visits and ensures you’re getting the right treatment for your needs.
How Do POS Plans Compare to PPOs, EPOs, and HMOs?
Here is the breakdown of some of the more common plan types:
| Plan Type | Referrals Required | Out-of-Network Coverage | PCP Required | Typical Costs |
|---|---|---|---|---|
| HMO | Yes | Emergency only | Yes | Lowest |
| POS | Yes | Yes (partial) | Yes | Moderate |
| PPO | No | Yes (full) | No | High |
| EPO | No | Limited or none | No | Low-Moderate |
- POS vs HMO: POS plans offer more flexibility, but at a higher cost.
- POS vs PPO: PPOs are more expensive but don’t require referrals and offer full out-of-network coverage.
- POS vs EPO: EPOs are often cheaper and don’t require a PCP, but don’t cover out-of-network care
Does a POS Plan Work with an HRA?
Yes. POS plans can be paired with a Health Reimbursement Arrangement (HRA). Employers can contribute to an HRA to help employees pay for qualified medical costs.
This setup helps reduce the financial burden on employees using a POS plan, especially when out-of-network care is needed.
Does a POS Plan Work with an HSA?
Yes, but only if your POS plan qualifies as a High Deductible Health Plan (HDHP). If it does, you can open and contribute to a Health Savings Account (HSA).
HSAs offer:
- Tax-free contributions
- Tax-free withdrawals for qualified medical expenses
- Rollover of unused funds year to year
This combination can give you both flexibility and savings, especially if you anticipate higher medical costs.
Conclusion
A POS plan offers a strong balance between cost savings and freedom to choose providers. If you want more control than an HMO provides but don’t need the full flexibility (or cost) of a PPO, a POS plan may be the right fit.
Want to compare available plans or get advice tailored to your health needs? Call Health Plan Advocates today—we’ll help you compare options, understand your benefits, and find coverage that fits your lifestyle and budget.
