Which plan provides discounted health care and pays fee-for-service but limits treatment locations?

• A. PPO
• B. Medicare
• C. Health Maintenance Organization (HMO)
• D. Point of Service (POS) Plan

Answer: (D)

Point of Service plans blend two ideas: you get discounted rates when you stay within the plan’s network, and you’re allowed to use out-of-network providers, but with higher costs and more restrictions. In practice, a POS plan typically reimburses services on a fee-for-service basis within the network, meaning providers bill for each service and the plan shares the cost with you. At the same time, access is limited to the network to keep costs down, and you usually need a primary care physician and referrals to see specialists within that network. This combination—discounted care, fee-for-service payment within the network, and limited treatment locations—matches the description of the plan described in the question.

A PPO offers discounts and fee-for-service-style payment and usually allows easier out-of-network access, without as strict a cap on where you can receive care. An HMO emphasizes staying in-network and often uses capitation rather than fee-for-service, with tighter restrictions. Medicare is a government program with its own structure. Hence, the plan described is a Point of Service plan.