HMOs vs. POS Plans

Posted in Health Insurance , HMO , Point of Service Plans

July 13th, 2009

Choosing a health insurance plan can be an intimidating process, especially because of all the abbreviations used to distinguish the different type of policy options. POS plans and HMOs are not an alphabetical collision, they are types of health insurance plans consumers can choose from either through self-insurance or more typically through their employer’s benefit plans.

HMOs are a “health maintenance organization,” that is, a type of managed-care health provider system. HMOs tend to focus their energies on preventative care and utilization management controls as a way to reduce the overall costs of health care both for themselves and their member groups. By opting into an HMO plan, an individual is immediately provided a community of doctors, hospitals and insurers that work together as a team and through this network, members are provided with one-stop shopping foroffice visits, hospitalization and surgery.

The Pros of HMOs

• Low out of pocket costs for premiums, appointments and treatment
• Preventative care like annual check ups, mammograms, prostate checks, blood pressure and the like are top priority
• There are typically no lifetime limits or caps restricting the amount of medical expenses the insurance will pay for

The Cons of HMOs

• Doctor visits outside the HMO service are not typically covered
• There are restrictive policies and procedures that may limit the type of specialized care an individual may receive

POS stands for “point-of-service” plans. These types of plans tend to be more a bit more flexible towards allowing the policyholders to seek out doctors of their choosing. POS plans offer a service network plan like HMOs do, and can additionally offset the costs if you choose to utilize a specialist or doctor outside of the primary care network. When you choose physicians and care within the POS network, most of the costs will be absorbed or will be minimal, very much like an HMO. However, when you choose to seek advice of doctors not within the network you will more than likely have to meet a deductible amount and be responsible for a portion of the doctor’s bill.

The Pros of POS Plans

• They provide flexibility to choose doctors that are out of network without having to go through the system
• Treatment within network require no deductible and low co-payments
• Out-of pocket costs are capped leaving more money in your pocket
• Customers get the benefits of both their network and freedom of choice

The Cons of POS Plans

• Co-payments for out of network care can be costly and range anywhere from 30%-40% of the billing amount
• Deductibles must be met before the benefits kick in
• You must navigate the HMO system to get specialist referrals

For more information on HMOs, POS plans, and other health care plans, please visit Go Insurance Rates for more research and information.