You're not alone if you're feeling confused by health-care plans that offer you benefits with one hand and place restrictions on you with the other. Fortunately, the world of managed care has begun to loosen up. And point of service (POS) plans may be leading the way. A POS plan is a type of managed care health system that maintains a network of physicians, hospitals, medical labs, and pharmacies for the health care of its members. POS plans blend the provisions of two major managed care models, combining the low out-of-pocket costs of health maintenance organizations with the flexibility of preferred provider organizations.
A quick overview of managed care
Managed care systems were developed to provide health care to members at a reasonable price. Costs are controlled in several ways. One way is to limit medical procedures that the plan considers unnecessary or inappropriate. Many traditional health insurance plans, in contrast, generally pay for the medical expenses incurred by its members without imposing stringent cost controls. Another measure that managed care providers use to hold down costs is to subsidize prevention and wellness programs, such as smoking-cessation classes, health education classes, and memberships to fitness clubs. The healthier you are, the less need you may have for medical care.
Your primary care physician is the gatekeeper to further care
As a member of a POS plan, you'll be expected to choose a primary care physician (PCP) from a network of doctors sponsored by the plan. Your PCP acts as your main contact within the network and is responsible for most of the care you receive on a regular basis. In addition, your PCP is said to act as a gatekeeper by coordinating your access to specialists and other caregivers within the network. But you may go to physicians outside the network if you choose.
If you need a specialist, it's best to get a referral
If you develop a medical condition requiring specialized care, you must get a referral from your PCP before you seek care from a specialist or another physician within the network. This screening process helps to reduce costs for both the POS and its members. If your PCP doesn't provide the referral you feel that you need, you can go outside the POS network for treatment and see any doctor or specialist you choose without consulting your primary physician.
You can choose to go outside the network, but at a price
A POS plan allows you the freedom to seek care outside its network of providers. If you choose, you can even mix the types of care you receive. For example, your child could see a pediatrician outside of the network, while you continue to receive health care from network providers. Of course, you'll pay substantially more out-of-pocket charges for any medical care your family receives from a non-network provider--encouraging you to stay within the network, but not requiring it. When using health-care services within the plan's network, you generally pay no deductible and only a minimal co-payment. If you go outside the network, you'll likely be subject to a deductible and may have to pay a substantial portion of the non-network physician's charges.
You'll pay nominal co-payments for network care
Co-payments are usually minimal for POS network care, often running about $10 per treatment or office visit. You always retain the right to seek care outside the network at a lower level of coverage. But substantial co-payments for care outside your POS network give you a strong financial incentive to stay inside the network for most or all of your medical needs. For example, your co-payment may be only $10 for care obtained from network physicians, but you could be responsible for up to 30 or 40 percent of the cost of treatment provided by a non-network provider.
There's generally no deductible for network care
When you choose to use network providers, there is generally no deductible. So, coverage begins from the first dollar you spend as long as you stay within the POS network of physicians. But an annual deductible must be met for out-of-network care. In most cases, you must pay a specified amount out of your own pocket before coverage begins. On average, individual deductibles are around $300 per year for an individual and $600 for a family. This deductible amount is in addition to your co-payments.
You should expect an annual cap on your out-of-pocket costs
Your annual out-of-pocket costs are generally limited to a maximum dollar amount stated in the policy. The annual limit on your health expenses for a POS plan, including deductibles and co-payments, is typically around $2,500 for an individual and $4,000 for a family. If you don't know what the cap on your annual payments is, talk to your insurance company or plan administrator.