POS Health Insurance Definition

A POS (Point of Service) health insurance plan is one of the big three managed-care plans along with PPO (Preferred Provider Organizations) and HMO (Health Maintenance Organizations). In a society where health care costs can be very expensive and services provided by different physicians are widespread, a POS plan is a compromise to both issues making this plan a very popular choice among health insurance seekers.

The Facts

The POS plan aims to combine the flexibility of the PPO with the low cost of the HMO. Like an HMO plan, this type of service relies heavily on preventive care, such as making timely doctor visits to minimize the risk of serious illness or injury. Like a PPO plan, it gives the insured a choice of providers and the freedom to seek services from any doctor without prior approval.

Pros

The costs of a POS plan are cheaper than other PPO plans. You have the flexibility to decide your primary physician, which HMO does not permit. The doctor’s in a POS plan try to keep costs manageable for their patients by referring them to others within the network. Even out of network visits can be mostly paid for by the insurer as long the referral was from your doctor. For small businesses, this may be the type of insurance that best suits your company especially if it has branches in multiple regions.

Cons

POS is a type of managed care program. People choose it because of its lower medical costs; however you get fewer medical options. You can pick a doctor of your choice but it must be within the network of physicians provided by the insurer. If medical attention is needed from specialist outside the network, you have to get a referral from your physician. You are also responsible for submitting any paperwork such as claims to the insurer, which is not required of you when visiting your PCP, who handles all of the paperwork for you.

Warning

If you obtain out-of-network treatment without being referred by your physicians, you will likely incur most or all of the expenses from the visit. A POS member must satisfy a deductible, which is applied to out-of- network visits without a referral, along with higher co-pays and coinsurance. In some cases, you may have to pay the entire balance and submit a claim to your insurer for reimbursement.

Misconceptions

Although highly recommended, it is not required for a person to pick a PCP (Primary Care Physician) under a POS plan. The insurer wants to keep costs low and provide a financial incentive for the POS member to stay in network for their treatment, and offers up more incentives if they choose a physician to monitor their health needs. Their co-pay and/or deductible amount will be cheaper if they visit their PCP than those who don’t have a primary doctor but receives medical care within the network. While POS member have the flexibility to seek medical attention from non network doctor, their out of pocket expenses will be substantially higher.

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