What Is a Point-of-Service Plan (POS)?

Older woman talking to doctor in office
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DEFINITION
A point-of-service (POS) plan is a managed care plan that lets you pay less if you use in-network hospitals, doctors, and health care providers.

A point-of-service plan (POS) is a form of managed care program that lets you choose a primary care physician from a list of in-network providers while also giving you the freedom to seek treatment from out-of-network health care providers. You’re covered when you seek care from out-of-network health care providers but at reduced benefit levels, for example, 60% or 70% of in-plan coverage. You’re also responsible for filling out and submitting your out-of-network service paperwork to your insurer for reimbursement.

Learn more about a point-of-service plan, how it works, how it differs from other plans, and the pros and cons of this healthcare coverage. 

Definition of a Point-of-Service Plan

A point-of-service plan (POS) is a managed care plan that lets you pay less if you use in-network hospitals, doctors, and health care providers. This plan also gives you the flexibility to see an out-of-network provider at a higher cost or reduced benefit level. 

  • Alternate names: Open-ended plan, HMO/PPO hybrid
  • Acronym: POS

A POS plan combines the characteristics of a preferred provider organization plan (PPO) and health maintenance organization (HMO).

How a Point-of-Service Plan Works

A POS plan combines features of both HMO and PPO plans. A POS plan works like an HMO because it lets you choose a primary care physician who will coordinate and monitor your health care. You’ll pick a primary care physician from a list of participating providers, and you’ll need a referral from them if you need to seek specialist services. 

Similar to an HMO plan, a POS plan designates a nominal copayment amount for in-network care, usually around $10 per visit or treatment. Also, there’s no deductible for using in-network providers.

Like a PPO, a POS plan lets you seek care from out-of-network providers, but you’ll pay a higher cost than you would incur with an in-network provider and you may have a deductible. In addition, you must also file a claim for reimbursement by your insurer.  With a POS plan, you don’t need pre-approval before receiving emergency care services from out-of-network facilities or providers.

Apart from emergency services, you may have to pay the full cost of all other benefits and services you receive from an out-of-network provider.

Pros and Cons of a Point-of-Service Plan

Pros
  • Network flexibility

  • Lower in-network copays

  • Zero in-network deductible

Cons
  • Referrals needed

  • Higher out-of-network copays

  • Out-of-network deductible

Pros Explained

  • Network flexibility: By blending aspects of HMOs and PPOs, a POS plan offers more freedom of choice to use in-network providers while obtaining other health care services from out-of-network providers. 
  • Lower in-network copays: The in-network copay starts as low as $10 per appointment.
  • Zero in-network deductible: There’s typically no deductible for using in-network health care providers. Coverage takes effect from the first dollar you spend, provided it’s within the POS network of providers. 

Cons Explained

  • Referrals needed: In a POS plan, you must select a primary care physician who coordinates your medical care. You must consult your physician before seeking care from a specialist.
  • Higher out-of-network copays: You are able to see out-of-network providers, but you may need to cover up to 40% of the costs. 
  • Out-of-network deductible: Coverage for out-of-network care won’t begin until you meet a specified deductible amount. 

Point-of-Service Plan (POS) vs. Exclusive Provider Organization (EPO)

A point-of-service plan has the characteristics of both HMO and PPO plans, but how does it compare to an exclusive provider organization (EPO) plan?

While a POS plan covers health care costs (or a portion thereof) for both in-network and out-of-network providers, an EPO plan covers only services from hospitals, doctors, or specialists in the plan’s network (except during an emergency). As a result, you don’t need a primary care doctor with an EPO since you can visit any in-network provider. If you choose an out-of-network provider, you will be responsible for all costs.  

POS EPO
You need a primary care doctor You don’t need a primary care doctor
You can use both in-network and out-of-network providers You can only use providers within the EPO’s network
Your POS may pay for a portion of your out-of-network care if you have a referral Your EPO won’t pay for services received out-of-network

Key Takeaways

  • A point-of-service plan combines aspects of PPO and HMO plans.
  • A POS plan gives participants more freedom to use out-of-network providers. 
  • A POS policyholder is responsible for completing and submitting their out-of-network service paperwork for reimbursement. 
  • You won’t pay a deductible on your POS plan when you use in-network providers.

Article Sources

  1. Office of Personnel Management. "Frequently Asked Questions: Insurance."

  2. Centers for Medicare and Medicaid Services. "Point of Service (POS) Plans."

  3. Empire BlueCross BlueShield. "Medicare Advantage and Part D," Page 42.

  4. Centers for Medicare and Medicaid Services, Health Insurance Marketplace. "What You Should Know About Provider Networks," Page 2.

  5. Connecticut State Office of the Healthcare Advocate. "Types of Insurance."