Illinois Health Insurance Practice Exam

Which organization issues Point of Service (POS) plans?

1. Insurance companies

2. Government agencies

3. Health Maintenance Organizations (HMOs)

4. Pharmacies

The correct answer is: Health Maintenance Organizations (HMOs)

The correct answer, Health Maintenance Organizations (HMOs), is rooted in the structure and function of POS plans. Point of Service plans are a hybrid type of health insurance that combines features of both HMOs and Preferred Provider Organizations (PPOs). In a POS plan, participants typically choose a primary care physician (PCP) who directs their healthcare and can refer them to specialists within the network, a characteristic inherited from HMO models. However, unlike traditional HMOs, POS plans also offer the flexibility for members to go outside of the network for healthcare services, although at a higher out-of-pocket cost. This dual approach makes POS plans attractive to consumers wanting the cost savings often associated with HMOs while also providing the freedom to access out-of-network providers if needed. This unique structure is why HMOs, as the issuing organization, play a crucial role in administering POS plans.