Point-of Service (POS) Plans
Point-of-service (POS) plans are Medicare Advantage plans that combine features of health maintenance organization (HMO) and preferred provider organization (PPO) plans. They typically cost less in exchange for more limited choices, but POS plans let you seek out-of-network health care services.
What Is a Medicare Advantage POS Plan?
Some Medicare health maintenance organization (HMO) plans offer a point-of-service (POS) option. These plans are sometimes called HMO-POS plans. They combine lower costs associated with HMO plans along with some out-of-network flexibility associated with preferred provider organization (PPO) plans.
The term point-of-service refers to where or from which doctor or other health care provider you receive medical services.
- You must choose a primary care physician (PCP) to coordinate all your medical care.
- You may not need your PCP’s referral to see a specialist, but it may speed things up.
- You’ll need prior authorization from your PCP or your specialist for some services or they won’t be covered.
- You will have separate deductibles for the HMO and POS portions of your plan.
Having two different deductibles in a POS plan may make a difference in your out-of-pocket costs. You will have one deductible for services you receive in your HMO network. You’ll have to meet a separate deductible for out-of-network services you receive as part of your POS option in the plan.
You are also not allowed to combine the two deductibles and you have to reach each one separately. You may also have to pay a higher copayment or coinsurance for out-of-network services with a POS plan.
Medicare POS plans are a type of Medicare Advantage plan sold by private companies that contract with Medicare.
Like other Medicare Advantage plans, all Medicare POS plans must cover everything covered by Original Medicare — Part A and Part B.
In addition to HMO and PPO plans, other Medicare Advantage plans include private-fee-for-service (PFFS) plans, special needs plans (SNP) and medical savings account (MSA) plans.
How Do Point-of-Service Plans Work?
Point-of-service plans work like HMO plans to keep premiums low by having a typically small network of doctors, hospitals and other health care providers to choose from. They work like a PPO by allowing you to see out-of-network doctors or other providers.
You begin by choosing your primary care provider who will coordinate all your health care needs going forward under the plan.
You will pay more for out-of-network services and your plan may limit the use of out-of-network providers. But it provides more flexibility than a regular HMO plan.
You may also pay more if you use an out-of-network doctor, hospital or other health care provider without first getting a referral from your primary care doctor.
You will typically have to pay a copayment with each appointment you make under a POS plan aside from your primary care doctor, but these are relatively inexpensive as long as you are using another in-network provider.
You may also have a fairly high deductible for using providers who are not in your network. This is usually to encourage you to rely on network providers.
If you enroll in a POS plan, you may be responsible for filling out and submitting all paperwork to your insurer whenever you use an out-of-network provider.
Costs of Point-of-Service Insurance
Costs for a Medicare POS plan usually fall somewhere between that for an HMO plan and a PPO plan. But it’s important to look at your particular situation to see if it is right for you.
While POS plans may have a lower initial cost, they can become more expensive if you rely on out-of-network health care providers. You should check to see that the doctors, specialists and other providers you rely on are in the POS network of the plan you are considering.
- Plans are typically more expensive than standard HMO plans.
- POS plans are typically cheaper than PPO plans.
- You may not have to meet a deductible with your primary care doctor.
- You may not have to meet a deductible for preventive care services.
- You will have to meet separate deductibles for in-network services and for out-of-network services.
- Any care you receive from out-of-network providers will cost you more.
It can sometimes be complicated and confusing to figure out what a POS plan will actually end up costing you in the long run. Do not be afraid to talk with a financial advisor or licensed insurance professional about what is the best value plan for your circumstances.
5 Cited Research Articles
- U.S. Centers for Medicare & Medicaid Services. (2019, September). Understanding Medicare Advantage Plans. Retrieved from https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf
- U.S. Centers for Medicare & Medicaid Services. (n.d.). Health Maintenance Organization (HMO). Retrieved from https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-advantage-plans/health-maintenance-organization-hmo
- U.S. Centers for Medicare & Medicaid Services. (n.d.). Medicare Advantage Plans. Retrieved from https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-advantage-plans
- Healthcare.gov. (n.d.). Point of Service (POS) Plans. Retrieved from https://www.healthcare.gov/glossary/point-of-service-plan-pos-plan/
- Cigna. (n.d.). What Is POS Health Insurance? (n.d.). Retrieved from https://www.cigna.com/individuals-families/understanding-insurance/pos-health-insurance