Point of Service (POS)

Types of Managed Care Plans

POS plans enable the consumer more freedom when it comes to selecting a provider for healthcare. There are, in general, three types of managed care plans: health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service plans (POS plans). HMOs provide care at a monthly fee (which is prepaid) and, in general, provide a wide variety of services, but consumers are limited to providers within the network.

PPOs offer the consumer a choice of providers within the network and payment is rendered at the time of service rather than beforehand. The PPO sponsor, generally the employer, negotiates fees for each type of service provided by the providers. POS plans incur no deductible and minimal copayments when the consumer selects a provider within the network. However, there is still an option to select a provider outside of the network, although incurring a deductible and a generally hefty copayment. With POS plans, payment is rendered at the time of service rather than beforehand.

Advantages to POS Plans

The major advantage of POS plans are that they offer low deductibles and copayments when the consumer selects an in-network provider, but the option is still there (in the case of extenuating circumstances) to select an out-of-network provider. With HMOs, there is limited choice of providers. With PPOs, certain services may entail high rates. With POS plans, there is a moderate degree of choice of in-network providers as well as low deductibles and copayments for many services. POS plans are also advantageous for consumers who do not consume a high amount of healthcare, because payment is rendered only at the time of service rather than prepayment.

Disadvantages to POS Plans

Disadvantages to POS plans are hefty copayments and deductibles when selecting an out-of-network provider. Consumers with rare diseases or who have a high likelihood of requiring an out-of-network provider may find this plan to be very costly.

Conclusion

Healthcare payment plans offer varying levels of choice of provider and ranges of services, with POS [Page 1389]plans generally falling somewhere in middle ground on both fronts. Employers often use these healthcare plans to lure highly qualified employees. So, it is important, as employers, to offer a plan that appeases employees. As healthcare is becoming more costly, it is important to consider what types of plans employers offer, and which plan is best for you.