What is a point-of-service plan?

With a point-of-service health insurance plan, you have the choice of using any physician and getting any service without needing a referral from your primary care doctor (like in an indemnity plan). However, the insurance carrier has a network of doctors, hospitals and other care providers that it has negotiated discounts with, and you have a financial incentive to use those "in-network" providers. You'll pay more (usually, a lot more) for using out-of-network doctors and hospitals.

The premiums usually run a little less than traditional indemnity plans, and there may be less paperwork because your doctor's office will likely have frequent (if not daily) contact with the insurance company.

A Point of Service (POS) plan is a type of managed care plan that allows members to choose to receive care from a participating or non-participating health care provider, with different benefit levels associated with the use of participating physicians. Similar to the PPO and HMO, the POS managed care plan has a group of health care providers and hospitals that are contracted to be part of the network. Members of a POS are encouraged but not required to select a primary care physician (PCP) for referrals. If members use a PCP for referrals, they may pay lower deductibles and copayments than a member who does not use a PCP. This managed care plan gives members more flexibility and freedom to play a role in their personal health care than a traditional HMO.