The term point of service, or POS, is used to describe a managed health care plan that allows participants greater flexibility to seek out-of-network medical services. In-network medical assistance includes both general care as well as wellness programs.
A point of service plan includes many of the features of health maintenance organizations (HMOs) as well as the flexibility of more-traditional indemnity (pay for service) plans.
In a point of service plan, the employee chooses a primary care physician; who is responsible for providing general medical care, administering preventative programs, and referrals to specialists. This care typically requires a relatively small copayment at the time of service.
The insured employee also has the option of seeking help outside of the POS network; however, this added flexibility comes at a cost to plan participants. When going out-of-network, the insured is usually responsible for paying both a deductible and a larger percentage of the medical services referred to as a coinsurance payment.
The added flexibility of the point of service plan means premiums would be higher than a health maintenance organization, but sill less than most preferred provider organizations.
Linda participates in a point of service medical plan through her employer. The terms of that agreement call for copayments of $20 at the time of service. If Linda seeks medical care out-of-network, she must first satisfy a $1,000 deductible. Her insurance company will then pay 70% of fees, leaving Linda with a 30% coinsurance payment.
Earlier in the year, Linda went to her primary care physician for a routine examination. While that examination resulted in a $20 copayment, the examination also discovered a problem.
Linda decided she wanted to seek medical care out-of-network. The cost of that care was $5,000. Linda's out-of-pocket costs would be calculated as:
|$4,000||Amount Subject to Coinsurance|
|-$1,200||Less: Linda’s Obligation at 30%|
|-$2,800||Less: Insurance Company’s Obligation|
In the above example, Linda's total out-of-pocket expense would be the $1,000 deductible plus the $1,200 coinsurance payment or $2,200.