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

Point-of-Service Plan (POS) Explained in Less Than 4 Minutes

Older woman talking to doctor in office
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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.