Making the right choice: POS or HDHP?

Choosing the right health plan can be confusing. So it begs the question, how do you know if you are making the right decision—in this particular case, choosing between a point of service (POS) or high deductible health plan (HDHP). 

When making such a decision, it is important to take a step back and reflect on how you have used your health plan in the past and consider any potential health care needs. We know it is tough to predict what your health care needs will be over the course of a year, but these are important factors to think about as they will help prevent you from selecting coverage that fails to meet your medical needs or keep you from getting too much coverage that will go underutilized. 

Also important is keeping premium cost top of mind. There is the common misconception that the more you pay for a plan, the better it is. To clarify, simply picking the most expensive plan does not guarantee it is the best plan for you. At the same time, you should be aware that selecting a plan with a lower premium will likely have a higher deductible. 

So let us clear some things up. 

Point of service (POS)

A point of service plan is a type of managed care plan that requires policyholders to make co-payments for different services, but also affords you the opportunity to go outside of the provider network if needed.  Keep in mind, to receive care from non-network providers will result in larger out-of-pocket costs. 

If you are someone who has frequent doctors visit or has several prescriptions that require regular refilling, a POS plan may be your best bet. The monthly premiums are a little higher than the HDHP premium, but instead of paying deductibles you have the comfort of knowing how much your visit will cost with copays, which is not true for HDHP. 

High deductible health plan (HDHP)

As its name implies, this plan has a high deductible.  With an HDHP, you will have to pay out-of-pocket for everything other than preventive care services until you hit your deductible.  HDHPs are the only plans that allow you to contribute to a health savings account (HSA).  An HSA is a tax-advantage healthcare savings account that allows pre-tax dollars to be contributed to pay for qualified healthcare expenses. 

With a lower monthly premium than the POS plan coupled with the HSA employer contribution, you are saving (and earning) money that could be put used for medical expenses later on down the line. HDHP plans tend to be more beneficial for younger, single employees with in relatively good health with few yearly doctor visits outside of the annual preventive services. 

In conclusion…

Choosing a medical plan does not have to be stressful.  Familiarize yourself with the plan specifics, consider how you use your health plan and factor in the premium and other financial benefits before making a decision. If you still have questions, reach out to Ryan Schweizer at: rschweizer@onedigital.com.