POS vs. HMO for Health Insurance

POS vs. HMO for Health Insurance
Getting a POS policy with a low deductible enhances its value.

Network Structure

A common feature of POS and HMO plans is their network-based structure. A network structure means that covered members get access to a network of providers contracted with the insurance company. Medical providers and facilities accept lower contracted service rates with insurers to participate in the network. Members get medical care, make copayments and sometimes pay deductibles, and then the provider files a claim with the insurance company to cover the remainder.

Specialist Referrals

A primary shared trait of HMO and POS plans is specialist referrals. HMOs always require members to get referrals to see a specialist, as do many POS plans. With these policy types, you select a primary care physician when enrolling. You see the PCP for regular office visits and routine medical care. When a specialist is needed for such things as ankle injuries or severe back pain, the PCP makes a referral. If you fail to obtain a referral form, the insurance company may not cover specialist care. Emergency services typically are exceptions to the referral requirement.

Out-of-Network Benefits

A compelling advantage of POS plans is out-of-network benefits. HMOs normally restrict benefits to in-network providers. This means that you likely pay the entire cost for services received out of the health care network. POS plans often have a smaller network, but they also allow access to out-of-network providers. Your copayments and deductibles are usually higher with out-of-network services, but the broader access aids people who travel a lot or who prefer out-of-network experts.

Deductible Format

In some cases, people participate in health plans known as HMO-POS policies. This setup is common in Medicare, for example. The point with this policy type is that you have the basic in-network services with the HMO portion, and the POS access to out-of-network providers. Policies that combine these formats typically maintain separate deductible requirements. You might have a $500 annual deductible for in-network care, but a $2,000 out-of-network deductible.