Definition of HMO & POS

Today millions of people have either an HMO or a POS health plan.

Millions of people are covered under both health maintenance organization and point of service plans, which are two of three managed health care plans in the United States today, along with the preferred provider organization plan. Both the HMO and POS plans provide members with cost-effective health care by coordinating their medical services.

Facts

Managed health care plans covered over 135 million people as of May 2010, up from 126 million people in 2009. Over 66 million people were covered under an HMO plan, while 8.8 million people were insured under a POS plan during the same time period, according to a HealthLeaders study.

HMO

The HMO plan is the strictest of the three managed health care plans, but it provides the most insurance benefits to its members. HMO plans provide members with a directory of physicians in their geographical area that will perform medical services at a discounted rate. Members must also choose a primary care physician, or PCP, who will be responsible for coordinating their health services, including referrals to specialists and doctors that are out of network. By utilizing their PCP, HMO members will not pay deductibles and will only have to satisfy small co-payments. HMO members are restricted to staying in network for care. Members may only go out of network for physician care with a referral from their PCP.

PPO

The POS plan is more of a hybrid between HMO and PPO plans. Members of POS plans are given a provider network to receive their medical services. By staying in network, they will not have to pay deductibles and receive higher insurance benefits. However, like PPO members, they also have the option to receive out-of-network care and still receive insurance benefits. By doing so they will have to pay higher out-of-pocket expenses.

Misconceptions

Although it is mandatory for HMO members to pick a PCP, it is not a required but highly recommended for POS members, according to the American Heart Association. Even if a POS member has chosen a PCP, he can still receive insurance benefits for non-network care while bypassing a referral.

Warning

Receiving out-of-network care can be costly for members of both managed health care plans. According to AgencyInfo, POS members can expect to pay up to 40 percent of their medical bill incurred from non-network services. HMO members, on the other hand, will be responsible for the entire medical bill if they seek non-network care without a referral from their PCP unless the medical visit is deemed an emergency.

References

• AgencyInfo: HMOs, PPO & POS Plans
• American Heart Association: Managed Health Care Plans
• Managed Care Fact Sheets: National HMO Enrollment 2009
• Managed Care Fact Sheets: National HMO Enrollment 2010