Definition of POS Insurance

Point-of-service (POS) insurance is one of three types of managed health-care plans available in the United States. This type of health-care plan combines features from the other two plans, the HMO (health maintenance organization) and PPO (preferred provider organization). These features and other benefits provide individuals and families with medical options that are both flexible and affordable.

Identification

• POS insurance provides its members with more control over their health-care decisions. Like HMO plans, POS members enjoy the same types of insurance benefits when they stay in-network for care. They pay no deductibles and small copay amounts. However, like PPO plans, POS members can also go out of network for care and receive insurance benefits, although these benefits are reduced.

Features

• Members of all three managed health-care plans are given provider networks, which are lists of doctors that are contracted to perform medical services at rates negotiated with the plans' insurers. These doctors provide services in the members' geographical locations. Members may also have to choose primary-care physicians (PCPs) from their provider networks, which is a requirement of individuals insured by HMO plans. PCPs are often considered gatekeepers, as they're in control of their patients' health-care decisions. However, not all POS plans require this of their members, according to the American Heart Association.

Benefits

• POS plans allow members to control their medical decisions even if they have PCPs. They're able to go out of network without consulting their PCPs and still receive insurance benefits. POS plans also limit the amount its members pay out of pocket. According to AgencyInfo, out-of-pocket costs for individuals are capped at $2,400, and capped at $4,000 for family plans, as of November 2010.

Out-of-Network Costs

• When POS members seek out-of-network health-care services, their out-of-pocket costs rise significantly. Members can be subject to deductibles averaging $300 for individual and $600 for families receiving nonnetwork services, as of November 2010. They can also be responsible for up to 40 percent of their total medical bills, states AgencyInfo.

Considerations

• According to the American Heart Association, POS insurance plans are becoming one of the more popular plans due to their flexibility and options. However, these plans cover the fewest number of people among the three managed health-care plans. The Kaiser Family Foundation states that, in 2010, POS plans covered 8.8 million members, which is a distant third behind PPO plans (53 million) and HMO plans (66 million).