POS vs. HMO for Health Insurance

Millions of people are covered under both POS and HMO health plans.

Two types of managed health care plans in the United States are point of sale (POS) and health maintenance organization (HMO). Both plans have similarities when it comes to provider networks, the advantages of having a primary care physician (PCP) and the benefits of receiving in-network care. However, HMO and POS plans differ when it comes to flexibility and restrictions.

Facts About POS and HMO Plans

According to the Kaiser Family Foundation, managed health care plans covered 135 million people in 2010, which was up from 126 million members in 2009. POS plans covered almost 9 million people in 2010. Also during that same year, the enrollment number for HMO plans stood at 66 million people, which increased from 64 million in 2009.

HMO

HMO plans provide their members with the highest insurance benefits of all three managed health care plans. Members are provided with a network of doctors in their geographical area who will perform medical services at discounted rates. When visiting an in-network physician, they will have little to no out-of-pocket expenses to pay such as deductible and co-payments. Unlike a POS plan, medical services under HMO plans are prepaid, which helps to control costs. This, however, restricts HMO members to receiving care within their provider network.

POS

POS plans are often described as a "hybrid" of both HMO and PPO plans. Members are also given a provider network where they will benefit from paying little to no deductibles and small co-pay amounts. However, unlike HMO members, POS members have the flexibility to go out of network to receive medical care at their own discretion. This freedom of choice, however, leads to higher deductibles and co-payments for members who choose to receive non-network care.

Misconceptions

Choosing a primary care physician (PCP) is a requirement for HMO members. Some POS plans may require their members to do so also. A PCP is chosen from the member's provider network. PCPs act as gatekeepers by being in charge of their patient's medical decisions and coordinated their care. To see other doctors or specialists, HMO members are required to get a referral from their PCP. However, POS members who have a PCP do not have to get a referral from their PCP to get non-network care.

Warning

POS and HMO members will experience higher out-of-pocket expenses and lower insurance benefits when going out of network for care without a referral. According to AgencyInfo.net, POS members can pay up to 40 percent of their medical bill they incur from an out-of-network doctor visit. HMO members will not receive any insurance coverage if they decide to seek medical care from a non-network doctor without a referral from their PCP. An exception: if the visit is considered an emergency.

References

• American Health Association: Managed Health Care Plans
• Agency Info: HMOs, PPO & POS Plans
• Califonia Office of the Patient Advocate: What is an HMO?

Resources

• Managed Care Fact Sheets: National HMO Enrollment 2009
• Managed Care Fact Sheets: National HMO Enrollment 2010