POS (Point Of Service) Insurance


Health insurance is complex, and many people may not fully understand their policies.  It's easy to pay for premiums without realizing what will or will not be covered, but this can lead to unpleasant surprises when it comes time to file a claim.  Whether you are currently insured or are shopping for a health insurance plan, it's a good idea to take the time to understand how your insurance works.  This will help you choose a plan that will cover your needs. 

In general, there are three primary types of insurance plans: PPO, POS and HMO plans.  A given insurance company may offer all three types, but you may not have a choice between them if you purchase your insurance through your employer.  Each type of policy has its own pros and cons, and recognizing the differences between them will help you to make the best possible decision for your needs. 

POS
A POS, or "point of service" plan provides a hybrid between a PPO and HMO.  In this type of insurance, you still choose a primary care physician to act as your main doctor and to refer you to specialists.  However, you can still receive benefits if you use a different doctor or facility; you will simply need to pay more out of pocket than you otherwise would.  The coinsurance for out-of-network care is higher than that for care given by your PCP. 

This differs significantly from an HMO, where out-of-network care is not covered at all.  If you go to the emergency room with a POS policy, your insurance company will still cover a portion of the expense.  You will not face claim denials with a POS policy as much as you might with an HMO.  The higher cost of out-of-network care is worth it for many insureds when the other choice would be a denied claim. 

POS plans differ from PPOs in that care given by your PCP is usually not influenced by your deductible, and preventative care is fully covered by insurance.  In this way, a POS is more like an HMO than a PPO.  You do, however, still need to pay copayments and coinsurance for other types of appointments as written in your policy. 

For example, a yearly physical would be fully covered, but coinsurance might apply to a doctor's visit for a sprained ankle later in the year.  The exact amount you pay will vary from one policy to the next, so you'll want to balance your premiums with your deductible and coinsurance to get the best price. 

Pros:
-- Preventative care is fully covered by insurance
-- Care given by your PCP is not affected by a deductible or coinsurance; you just pay a copay
-- You can seek care outside of your network if you wish

Cons:
-- Receiving care outside of your network will cost more out-of-pocket
-- Out-of-pocket costs can be quite high for non-routine care
-- You need to go through your PCP for referrals

POS plans are common among employers, and they can be the best compromise between the other two types of insurance.  Depending on your needs, you may find that a high-deductible POS plan is the best deal as preventative care is fully covered.  This means that many healthy insureds can keep their out-of-pocket costs very low.  You'll need to consider the price difference between all the plans to find out for sure whether your POS would be the best value for your needs, but the flexibility and availability of low-cost care makes a POS very attractive.

Copay, Coinsurance, Deductibles

All insurance policies will come with set copays, coinsurance and deductibles.  These figures vary from one company to the next, and these figures will determine the cost of your premiums.  In general, the more you pay out of pocket for care, the less your insurance premiums will cost.  This means that high deductible policies will be cheaper, but medical care itself will cost more out of your pocket.  Balancing these two expenses is the key to finding affordable healthcare. 

A copay is a flat-fee amount that you pay when you seek care at any doctor's office. The amount of your copay will vary depending on the type of care you receive.  For example, the payment for an office visit might be $25, but an emergency room visit might be $100.  The amount of your copay for various services is usually listed on the back of your insurance card. In an HMO, the copay is the only fee you pay.  PPO and POS policies will also require you to pay coinsurance depending on whether your provider is inside or outside of your network. 

Coinsurance is the amount of money you must pay for medical care in addition to your copayment.  It's usually calculated on a percentage of the total bill.  For example, in-network visits might give you a 20% copay while out-of-network visits could be 35%.  In a PPO and POS policy, your coinsurance percentage will be higher for care received at an out-of-network provider.  Once you reach your deductible for the year, you generally will no longer need to pay coinsurance.  At the end of the year, the coinsurance will reset along with your deductible for the new year. 

Policies with high deductibles will cost less than those with lower deductibles.  Your deductible is an annual amount; at the beginning of the next year, it resets and you must resume paying coinsurance until the deductible is met again.  Your deductible is calculated separately from your copays and coinsurance.  A portion of each visit made throughout the year is paid toward the deductible until the deductible figure has been met.  Most insurance companies also offer out-of-pocket maximum figures.  Once that figure is reached, you will no longer pay coinsurance or copays.