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Understand Your Point-of-Service Plan’s Trade-Off

Save money with a limited network, but you’ll need a referral.

Written by: Andrew Hall.

Key Takeaways

  • Point-of-Service (POS) benefits depend on whether the policyholder uses in-networkIn-network refers to the doctors, hospitals and other providers that are inside of your provider network. This is the group of providers that has agreed with your health insurance company to treat its customers. or out-of-networkOut-of-network refers to doctors, hospitals and other providers that do not have an agreement to treat your health insurance company's clients. Visiting an out-of-network provider typically means more out-of-pocket costs and less coverage. health care providers.

  • POS plans only represent a small share of the health insurance market.

  • POS plans usually deliver lower costs, but they come with a limited provider networkA provider network is a group of doctors, hospitals and other specialists that have an agreement with an insurance company to treat its clients. It's usually less expensive for you to see a doctor within your provider network..

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What is a point-of-service insurance (POS) plan?

A POS plan is a managed care plan that combines elements of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). POS plans offer both In- and Out-of-Network benefits and require a primary care provider to direct all specialized care through referrals.

What is the difference between POS, HMO, and PPO?

A POS plan is different because it provides services that are like both an HMO and PPO. A POS plan is similar to an HMO because you must have an in-network primary care doctor, and they must refer you to any specialty care. The same POS plan is similar to a PPO because you can be covered for services outside your network.

Here’s a comparison of the trade-off between POS v. HMO v. PPO:

Must select a primary care provider for specialty referrals

  • HMOs and POS plans require you to have an in-network primary care provider (PCP). To receive specialty care, the PCP must refer you to a specialist.
  • PPO plans do not require you to have a PCP and do not require referrals for specialty care.

Your responsibility costs for services from providers outside of your plan’s network

  • An HMO plan will usually require you to cover most or all of the costs for an out-of-network provider.
  • POS and PPO plans allow you to see providers out of your network. Your plan usually covers less of your costs for an out-of-network provider than in-network providers.

What costs can I expect with a POS plan?

The cost of a POS plan may be a barrier. It’s cheaper than a PPO plan (the highest premium), but the premiums for a POS plan can be much higher than HMOs. With a POS plan, your out-of-network deductible is high. Unless you’re planning to use the POS plan’s out-of-network services regularly, you may want to consider the HMO because you could save money on lower premiums.


What does “point of service” mean?

The term “point of service” refers to where and what provider you visit for services. Your coverage varies on whether you see a provider who’s in- or out-of-network and if you’ve received a referral.

Are POS insurance plans all the same?

No. Depending on the plan design and the insurance provider, the features of a POS plan may differ, as well as plan name. Regardless of plan or name, POS insurance works best if you’re willing to follow the terms of the health plan.

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