Point-of-service, health maintenance organization, and preferred provider organization are the three common group health insurance structures in the United States. POS insurance blends some of the benefits of HMOs and PPOs, but also has some restrictive requirements such as specialist referrals and high out-of-network costs.
No Deductibles and Low Co-Pays
With a POS policy, you typically have no deductible, and your co-payments for regular office visits are from $10 to $20 as of 2015, according to the U.S. Department of Health & Human Services website. This cost structure applies to services received from an in-network medical provider or facility. Having no deductible minimizes the potential for high out-of-pocket expenses. Also, the premium costs for a POS policy are normally about half of those for a PPO plan.
Because they blend core benefits of PPO and HMO policies, coverage flexibility is a major advantage with POS plans. First, POS insurance products offer a better mix of in-network and out-of-network benefits than HMOs, according to a February 2013 Bankrate article. While out-of-network fees are typically higher than in-network charges, you have access to a broader range of general practitioners and specialists at still reasonable rates with POS. Many PPO plans restrict optimum benefits to in-network providers within the state or limited coverage territory. POS plans have no such restrictions.
Wasted Premiums and High Out-of-Network Costs
One reason to use a POS plan is it can mean affordable access to a broad range of specialists. Someone who rarely or never sees specialty providers likely won't get the value from a POS that he would through another plan type. Also, the out-of-network deductibles and premiums are very expensive relative to in-network fees. Avoiding POS plans with deductibles over $750 can help mitigate the potential cost extremes, according to Bankrate. Getting a referral to out-of-network specialists from a primary care physician can also reduce costs in many POS plans.
Two key complexities make POS health insurance frustrating for some covered members. First, you have to get a referral from a PCP to see a specialist with many policies, just as you do with an HMO. This can lead to extra office visits for someone with regular health care needs. Also, while many group networks have simple claims processes for insured members, Bankrate notes that out-of-network care with a POS requires a lot of paperwork. You typically have to pay the doctor's fees up front, file a claim for reimbursement, and wait for the insurer's decision.
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