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HMO & POS Differences

Health Maintenance Organization and Point of Service plans are two of three types of managed health care policies; Preferred Provider Organization is the other coverage. HMO and POS plans have several similarities as both utilize provider networks and Primary Care Physicians to manage health care costs. However, insurance seekers choose HMO plans based on its low out-of-pocket costs availability while others pick POS plans for its flexibility and control over their medical options.

  1. Facts About Plans

    • The three managed health care plans provide members with provider networks. These are groups of doctors in the members' geographical areas who are contracted to perform medical services at discounted rates. Members receive higher insurance benefits by utilizing their services which means they pay less out of pocket. HMO and some POS members do not pay deductibles and only have small co-payments to satisfy for in-network doctor visits. HMO plans are more accessible than POS plans based on its enrollment numbers. In 2010, more than 135 million people were covered under managed health care plans in the U.S.; 66 million had HMO plans while 8.8 million had POS coverages, according to MCOL Research from U.S. Department of Labor data.

    Use of Primary Care Physicians

    • Some POS and all HMO plans require member to choose Primary Care Physicians from their provider networks. PCPs are known as gatekeepers and their responsibilities include coordinating the most cost-effective health care services for their patients. They accomplish this by denying medical services they determine are unnecessary and refer their patients to specialists and other doctors for essential care. By getting referrals from their PCPs for doctor visits, members pay little to no out-of-pocket expenses for their doctor visits.

    Flexibility And Doctor Options

    • HMO plans place the most restrictions on their members of all three managed health care coverages. HMO members are required to stay in-network for care and need referrals from their PCPs to go out-of-network. POS members have the flexibility to stay in their networks to receive care or go outside the network and still receive insurance coverages, although less than they would get for in-network services. Also, POS members who do have PCPs do not have to get referrals for non-network care and their insurers cover some of the incurred medical expenses.

    Out of Network

    • HMO members are responsible for all of the medical expenses incurred during out-of-network doctor visits by themselves as their insurers do not cover these visits. The exceptions are if they received referrals from their PCPs or the visits are emergencies. Although POS members maintain some insurance coverage, they could be responsible for up to 40 percent of their medical costs resulting from non-network services out-of-pocket. Some POS plans limit the amount of expenses their members pay on their own. For example, individuals may only pay up to $2,400 per year on out-of-pocket expenses while families will not pay more than $4,000.

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