Identification

• A POS is a type of health plan that contains both elements of a health maintenance organization (HMO) and preferred provider organization (PPO), explains the American Heart Association. An HMO requires members to see doctors and receive services only from inside the network. A PPO allows members to use doctors outside of the network, but does not cover these fees at the same rate. Freedom of choice in the POS health plan gives members an opportunity to seek the medical care that is right for them.
  
  

Features

• A POS is similar to an HMO because they both have in-network services that require copayments and a "gatekeeper," or primary care physician (PCP). The American Heart Association explains that some POS plans only encourage, but don't require, members to choose a PCP. Members who choose not to use PCPs for their referrals, but still stay within the network, pay higher copays or deductibles than members who utilize their PCPs.
  
  

Terminology

• The American Heart Association states that a POS plan can be called an HMO/PPO hybrid of an "open-ended" HMO. The name "point-of-service" means that members can choose which option, an HMO or PPO, each time medical treatment is needed. Members aren't required to get a referral from their PCP to see a specialist, as they are with an HMO, but are rewarded with lower costs if they do.
  
  

Advantages

• POS plans are becoming popular in 2010 because they exercise more freedom and flexibility of options than HMO plans, according to the American Heart Association. As long as you stay within the network of providers, you pay only a co-payment or low coinsurance for services. POS members also have the option to choose out-of-network care. Services received outside of the network are typically reimbursed on a fee-for-service basis.
  
  

Disadvantages

• POS members may choose to visit out-of-network providers at their own discretion, according to the American Heart Association. If they do, then copays, deductibles and coinsurance for an out-of-network provider becomes significantly higher than for those providers in the network.