Is the POS Plan an Insurance or a Discount Plan?

Point of Service insurance plans provide coverage to millions of Americans. POS plans offer cost-effective health care and allow members to control some of their medical options. Discount health plans, which give individuals another way to lower their health care expenses, are vastly different from POS plans. There are several differences between the two. Most importantly, discount health plans are not health insurance.

What are POS Plans

• A POS plan is one of three types of managed health care plans, with Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) being the other two. POS members have provider networks -- lists of doctors in the members' geographical areas contracted to provide medical services at discounted rates. When members receive health care services within their networks, they receive greater insurance benefits, make small co-payments and have no deductibles.

Features of POS Plans

• HMO plans are hybrids because they combine features from the other two plan types. Like HMO members, some POS patients are required to choose Primary Care Physicians (PCPs) from their provider networks. PCPs are doctors who authorized to make medical decisions for their patients. If clients need health care services, PCPs refer them to specialists or other doctors. However, POS members who do not have PCPs can go out of network for care like PPO members. They still receive insurance coverage, albeit less than if they stay in the network.

What are Discount Plans

• Discounted health plans give individuals another way to lower their health care costs when they need medical attention. In exchange for monthly or yearly membership fees, discount health plan members receive care at lower rates than doctors typically charge. There are discount plans to cover health, dental and vision care services as well as prescriptions.

Advantages and Disadvantages of Discount Health Plans

• To apply for discount health plans, applicants need no medical exams. Also, pre-existing conditions -- medical problems present before applying for a health plan -- are generally not a consideration for companies accepting applicants. However, discount health plans are not health insurance. It is possible that members won't receive discounted rates from their regular doctors because they do not participate in these plans.