HMO vs. POS: What’s the Difference?

What do HMO and POS stand for?

HMO stands for Health Maintenance Organization, and POS stands for Point of Service. These are two types of health insurance plans. HMO and POS plans have unique features, advantages, and disadvantages. Understanding the differences between these health plans can help you make informed health care decisions.

What is an HMO plan?

HMO plans are known for their cost-effectiveness. These plans require members to choose from a network of providers, hospitals, and facilities.

Here are some other features of HMO health plans:

• Lower premiums
• More predictable out-of-pocket costs
• Required to choose a primary care physician (PCP) who coordinates care within the network
• Referrals from PCP are typically needed to see specialists
• Out-of-network care is generally not covered except in emergencies
• May offer low or no deductible options

What is a POS plan?

POS plans are also a cost-effective health insurance plan. They feature a more select group of in-network providers, which results in lower overall costs.

Here are some other features of POS health plans:

• Moderate premium costs
• Required to choose a PCP who manages access to other providers
• Referrals from PCP are typically needed to see specialists
• Out-of-network care is available but at a higher cost
• Typically, no deductibles as long as PCP is selected

What are the main differences between HMO and POS plans?

When it comes to the costs and details of HMO vs. POS plans, how do they stack up?

Here are some more ways HMO and POS plans compare:

• In-network Providers: If you have a preferred doctor or hospital, check if they are part of the plan's network. HMOs are more restrictive, while POS plans offer more flexibility.

• Cost and Budget: Look at your budget. Think about the trade-offs between monthly premiums, deductibles, and out-of-pocket costs. HMOs are usually less expensive, while POS plans tend to be more expensive. Both types of plans are still known to be cost-effective.

• Referrals and Care Coordination: If you prefer not to deal with referrals, POS plans might work better for you than HMO plans. However, you'll have to pay more for out-of-network care. If you're comfortable with a PCP coordinating your care, HMO and POS plans are both good options.

Is an HMO plan right for me?

HMO plans may be right for individuals who want to save more on their health plans. If you don't mind having to stay in-network and use a PCP to coordinate care, an HMO plan may be a good fit.

Is a POS plan right for me?

POS plans may be right for those who want a little more flexibility in their health plan but still want to save costs. If you have out-of-network specialists, and don't mind paying more to use them, a POS plan may be a better fit.

Before choosing any type of health insurance plan, make sure to review the details of coverage. These are high-level descriptions of HMO vs. POS plans. Plans can vary depending on your insurance carrier or if you purchase one on your own from the Health Insurance Marketplace.