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Differences Between PPO & POS Medical Coverage

Point of Service and Preferred Provider Organization are two of three types of managed health care plans; Health Maintenance Organization is the other. Millions of people are insured yearly by both plans which provide members with cost-effective coverages and access to quality medical care services. However, there are several differences between the two plans when it comes to out-of-pocket costs and physician choices.

  1. PPO Plans

    • PPO plans provide the most flexibility of the three managed health care policies. These plans provide members with provider networks, which are doctors in their geographical areas who are contracted to provide medical service at discounted rates. PPO members who use their in-network doctors will pay small deductible and co-payments. However, members are able to go out of network for health care services and still receive insurance benefits. This isn't the case with HMO plans, which restricts members to receiving care within their provider networks and forces them to pay for their entire non-network doctor expenses without insurance coverage unless the visits are emergencies. In 2010, more than 53 million people had PPO health insurance, acording to MCOL Research.

    POS Plans

    • In 2010, more than 8.8 million people were covered under POS plans. These coverages are considered hybrids of PPO and HMO plans because of its characteristics. Like all managed health care plans, POS members are given provider networks to receive care at lower rates. Members typically pay no deductibles and have to satisfy small co-pay amounts when using in-network services. Like PPO plans, members of POS plans are able to go out-of-network for care and still receive insurance coverage. However, their coverage amounts will decrease causing members to pay more out of pocket.

    Costs for Services

    • Members of POS and PPO plans pay different amounts for health care services. POS members pay as little as $10 in co-payments for in-network care. For out of network visits, POS member can be responsible for up to 40 percent of their medical bills but insurers limit their out-of-pocket expenses. For in or non-network care, individuals' and families' costs are generally capped at $2,400 and $4,000 respectively. PPO members can pay up to 50 percent of their out-of-network visits. Their out-of-pocket expense are limited by their insurers as well. Network and non-network costs for individuals are generally capped at $1,200 and $2,000 respectively; family expenses are limited to $2,100 for network care and $3,500 for out-of-network care.

    Primary Care Physicians

    • Members of PPO plans are not required to choose Primary Care Physicians rom their provider networks. Some POS plans have this requirement however. PCPs are doctors who are selected by members to be in charge of their medical decisions which limits their freedom. PCPs responsibilities include coordinating patients' health care services by providing care and referring them to other doctors for specialized treatments. Medical services wanted by patients can be denied by PCPs if they consider them unnecessary. For doctor visits requiring referrals, patients are solely responsible for all medical costs if they go without them.

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