In general, the biggest difference between PPO vs. POS plans is flexibility. A PPO, or Preferred Provider Organization, offers a lot of flexibility to see the doctors you want, at a higher cost.
POS, or Point of Service plans , have lower costs, but with fewer choices. There are many more details you’ll want to compare, as well.
What is PPO?
PPO stands for preferred provider organization. Just like an HMO, or health maintenance organization, a PPO plan offers a network of healthcare providers you can use for your medical care. These providers have agreed to provide care to the plan members at a certain rate.
But there are some differences. Let’s go over the key things to consider when deciding if a PPO plan is right for you.
Unlike an HMO, a PPO offers you the freedom to receive care from any provider—in or out of your network. This means you can see any doctor or specialist, or use any hospital.
In addition, PPO plans do not require you to choose a primary care physician (PCP) and do not require referrals. For example, if you already have a doctor you like, you can continue receiving care from that provider.
If you need to see a specialist, you do not have to first consult with a PCP. No referrals are required for any doctor, specialist or hospital.
Another bonus: If you find yourself in need of medical care when you are away from home, you can see any healthcare provider you choose.
A PPO health insurance plan provides more choices when it comes to your healthcare, but there will also be higher out-of-pocket costs associated with these plans.
Your monthly premiums will be higher and your copays for office visits will also cost more. Plus, there is also an annual deductible that must be met.
To help reduce costs, remember that using in-network providers, doctors and other healthcare professionals who are a part of your PPO network will save you money.
What is POS?
A point-of-service (POS) plan is a type of managed-care health insurance plan that provides different benefits depending on whether the policyholder uses in-network or out-of-network healthcare providers.
A POS plan combines features of the two most common health insurance plans: the health maintenance organization (HMO) and the preferred provider organization (PPO).
POS plans represent a small share of the health insurance market. Most policyholders have either HMO or PPO plans.
A POS plan is similar to an HMO. It requires the policyholder to choose an in-network primary care doctor and obtain referrals from that doctor if they want the policy to cover a specialist’s services.
And a POS plan is like a PPO in that it still provides coverage for out-of-network services, but the policyholder will have to pay more than if they used in-network services.
However, the POS plan will pay more toward an out-of-network service if the primary care physician makes a referral than if the policyholder goes outside the network without a referral.
The premiums for a POS plan fall between the lower premiums offered by an HMO and the higher premiums of a PPO.
POS plans require the policyholder to make co-payments, but in-network co-payments are often just $10 to $25 per appointment. POS plans also do not have deductibles for in-network services, which is a significant advantage over PPOs.
POS plans offer nationwide coverage, which benefits patients who travel frequently. A disadvantage is that out-of-network deductibles tend to be high for POS plans.
When a deductible is high, it means that patients who use out-of-network services will pay the full cost of care until they reach the plan’s deductible.
A patient who never uses a POS plan’s out-of-network services probably would be better off with an HMO because of its lower premiums.
Difference between PPO and POS
The main difference between PPO and POS insurance plans is that it’s more challenging to see an out-of-network provider in a POS. It is possible to see an out-of-network provider in a POS plan, but it will cost more money and you will have to do all the administrative paperwork yourself.
However, there are a few other factors that differentiate PPO and POS health insurance plans:
- Costs: Typically, a PPO is more expensive than a POS. Sometimes, a POS can be half as expensive as a PPO.
- Primary Care Provider: In a POS, you must choose an in-network primary care provider that provides your regular care and makes all your references for additional medical services. With a PPO, you can see whomever you’d like, but you may have to pay more if they are out of network.
- Referrals: You can only see a specialist in a POS if your primary care physician refers you. In a PPO, you may have more freedom to see a specialist if you feel it is necessary.
- Flexibility: With PPO, you have more freedom to choose providers outside the network, and you don’t even need a referral to see a specialist. You can directly schedule an appointment with a specialist of your choosing. POS plans also allow out-of-network care, but you may need a primary care referral to see specialists or undergo certain medical procedures.
- Deductibles: PPO plans often have deductibles, meaning you have to pay for approved services until you meet the deductible limit. That’s when your plan starts sharing costs. On the other hand, POS plans often have no deductible if you stay within the network and get referrals from your primary care physician for specialist visits.
- Premiums: A PPO plan attracts higher monthly premiums, and higher premiums mean higher upfront costs. It seems the increased flexibility comes with a cost. POS plans may have lower premiums than PPOs because they have fewer options. POS plans usually cost less but have some restrictions on the health care providers you can visit.
PPO vs. POS: Comparison Chart
