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Benefit design is a term that refers to health plan rules about which doctors are in or out of the provider network and how much you’ll share in the cost when you get medical care. It’s a key factor when you’re comparing health insurance plans. Point of service (POS) and preferred provider organization (PPO) plans are two types of benefit designs, along with health maintenance organizations (HMOs) and exclusive provider organization (EPOs).
If you’re choosing between POS and PPO plans, you’ll want an understanding of the benefits, costs and limitations for each type of health insurance plan.
What Is POS insurance?
A POS health insurance plan offers some of the flexibility found in a PPO, coupled with limitations found in health maintenance organization (HMO) and exclusive provider organization (EPO) plans.
A POS plan requires that you name a primary care provider and get referrals from that provider to see most specialists. Similar to a PPO, you can generally get out-of-network care—if your primary care provider refers you to that out-of-network professional.
POS plans aren’t nearly as common as PPOs, HMOs or EPOs. Our review of Affordable Care Act (ACA) marketplace plans found a tiny number of POS plans compared to the other benefit designs. Those plans aren’t common in employer-sponsored health insurance either. Only 10% of employees covered by an employer-sponsored health plan have a POS plan, according to a 2023 Kaiser Family Foundation report. That means there’s a good chance a POS won’t even be a health insurance option for you.
Who may benefit from a POS plan: You want the option to get out-of-network care and you’re OK with naming a primary care provider and getting referrals to see most specialists.
What Is PPO insurance?
A PPO health insurance plan offers the most flexibility of any health insurance plan. That freedom typically comes with the highest premiums.
A PPO lets you get out-of-network care (at a higher cost than in-network care) and you don’t have to name a primary care provider to oversee your care or get a referral to see a specialist.
The Kaiser Family Foundation reports that PPO plans comprise about half of employees covered by group health insurance but aren’t nearly as common in the Affordable Care Act (ACA) marketplace. HMO and EPO plans dominate the ACA marketplace, but they make up a much smaller percentage of employer-sponsored health insurance plans.
Who may benefit from a PPO plan: You want the option to get out-of-network care and don’t want to name a primary care provider or get referrals to see specialists.
How Are PPO and POS Plans Similar?
Both PPO and POS plans have provider networks. In these networks, providers contract with the insurance company for payment. Both plans have many of the same types of costs, including premiums, copays and coinsurance. The cost of health insurance premiums is similar for the two plan types.
PPO plans don’t require that you stay in the provider network. You can get out-of-network care in a PPO, but that care generally costs more than if you visit an in-network provider. A POS plan also lets you get out-of-network care, but the plan may require a referral from your primary care provider.
POS vs. PPO plans: What’s the Difference?
POS and PPO plans differ in many ways, including flexibility and costs. PPO health insurance allows you more freedom to get care anywhere, while a POS plan may allow out-of-network care but demand a primary care referral.
A PPO health insurance plan doesn’t typically require that you name a primary care provider to oversee your care. You also don’t need to get primary care referrals to see a specialist. A POS plan generally requires that you name a primary care provider and get referrals to see specialists, though there may be an exception to see an OB-GYN.
PPO and POS plans generally both have premiums, copays and coinsurance. One cost difference is that PPOs typically have a health insurance deductible, while POS plans often don’t have a deductible as long as you get referrals from a primary care provider. A deductible is what you have to pay for health care services before a health plan begins to pick up the costs for care. Once you reach the deductible, you share costs for care with the health insurance company, which is called coinsurance.
POS vs. PPO: Cost Comparison
The average PPO plan for a 40-year-old costs $576 a month compared to $607 a month for a POS plan. PPO and POS plans are typically the most expensive types of health insurance plans—much more expensive than HMOs and EPOs.
A Forbes Advisor analysis of ACA marketplace plans found that ACA plan costs vary by age, location, tobacco use, plan tier, dependents and plan design.
Average Monthly POS and PPO Health Insurance Costs
POS vs PPO: Primary Care Provider Requirements Comparison
POS and PPO plans differ in terms of whether you need to have a primary care provider.
How primary care provider requirements compare for POS and PPO
| POS | PPO | |
|---|---|---|
Need a primary care provider? | Yes | Yes |
POS vs. PPO: In-network Requirements Comparison
PPO plans let you get care outside of your provider network. That care comes at a higher cost. POS plans often let you get out-of-network care, but your primary care provider may need to refer you to that out-of-network provider.
How in-network requirements compare for POS and PPO
| POS | PPO | |
|---|---|---|
Plan pays for out-of-network care? | Varies, but often pays for out-of-network care if referred by PCP | Yes |
POS vs. PPO: Referrals to See Other Providers Comparison
A POS plan typically requires a referral to see a specialist, except if you need to see an OB-GYN. A PPO doesn’t require any referrals to see specialists.
Comparing referrals for POS and PPO plans
| POS | PPO | |
|---|---|---|
Need PCP referrals to see specialists? | Yes, except in certain cases | No |
Which Is Better: a PPO or POS Plan?
Whether a PPO or POS plan is better depends on what you want from the health plan and how much freedom you want to get care anywhere.
If you can choose between a PPO and POS plan, consider the cost for each plan. Look at the premiums and weigh those with out-of-pocket costs, including deductibles, coinsurance, copays and out-of-pocket maximums.
Dig into each plan’s provider network to make sure your providers are considered in the plan’s network. If you choose a PPO and your provider isn’t on the plan’s network, you can still get care from that professional, but you will have to pay more for care. If you choose a POS, you can often still get out-of-network care but may need help from your primary care provider.
Compare POS and PPO Health Insurance Plans From Our Partners
1
Aetna
Coverage area
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.2 million
Physician copays start at
$20
2
Blue Cross Blue Shield
Coverage area:
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.7 million
Physician copays start at
$10
3
Cigna
Coverage area
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.5 million
Physician copays start at
$0
POS vs. PPO Plan FAQ
Is a POS plan better than HMO?
A POS plan might be better if you want coverage that offers out-of-network care, but an HMO might be a better bet if you’re looking to pay less for health insurance.
POS and HMO plans are similar in some ways, such as requiring a primary care physician and referrals to see specialists. But they differ in other aspects, namely an HMO doesn’t generally cover out-of-network care, while a POS often allows it if you get a primary care referral.
Which type of plan is better for you depends on your preferences and how much you want to pay for health insurance.
What are the benefits of a POS health plan?
A POS health insurance plan generally lets you get health care out of your provider network as long as you get referred by your primary care provider. POS plans also don’t usually have deductibles as long as you stay in network, which can lead to lower out-of-pocket costs compared to other plans.
Why would someone choose a PPO?
A PPO health insurance plan can be a good choice if you’re looking for flexibility to see any health care provider without getting a primary care physician referral. That out-of-network care typically comes at a higher cost than in-network care.
PPOs are usually more expensive than health maintenance organization (HMO) and exclusive provider organization (EPO), but those higher costs are coupled with more freedom to get care where you want and without the help from a primary care provider.
