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HMO and POS Plan Differences
How do HMOs and POS plans work?

In managed care, including HMOs (health maintenance organizations) and POS (point-of-service) plans, you usually get care from a set group of doctors and hospitals that make up the plan's provider network. This differs from fee-for-service (indemnity) insurance, which does not have provider networks and permits you to get care from any doctor or hospital. However, fee-for-service insurance may have less predictable and higher out-of-pocket costs.

The table below highlights some of the important similarities and differences among HMOs, POS plans and fee-for-service. The table presents general rules. Be sure to check with your plan or employer to verify information.

This report only contains information on HMOs and POS plans in New Jersey.

	HMO	POS	Fee-for-Service
Can you get services from providers who are not in the network?	No. The HMO pays for covered services only if you go to providers in the network.	Yes. If you use providers who are not part of the network you will pay more.	Yes. You may receive care from any provider of your choice.
How do you pay for services?	There is no deductible. You are charged a pre-set amount or co-payment (usually between $5 and $25) for a physician office visit. You do not usually need to fill out claim forms.	If you go to a provider who is in the network, there is no deductible and you are charged a co-payment. No claim forms need to be filled out. If the provider is not in the network, you pay a deductible and a greater portion of the costs. You may need to fill out a claim form.	After you pay a deductible, you pay a percentage of the cost of the covered services and the insurer pays the remaining costs. Usually, you pay 20% of the cost and the insurer pays 80%.
Do you need to choose a primary care provider (PCP)?	Yes. You are usually required to choose a PCP from a list of network doctors. Your PCP takes care of most of your medical needs.	Yes. You usually need to select a PCP from the list of network doctors.	No. You can get care from any doctor of your choice.
Do you need a referral from your PCP to go to a specialist?	Yes. Before you go to a specialist, you usually need a referral from your PCP.	Depends. You need a referral from your PCP only if you want to go to a specialist who is in the network. You do not need a referral to go to a specialist who is not in the network.	No. You do not need a referral to go to a specialist.