We all know that health insurance is something you shouldn't live without - but what about vision care insurance? Your ability to see is surely almost as important as your health. Vision care insurance can be purchased as a group benefit through your employer or as an individual policy. But how does the cost compare to the coverage you'll receive?(Getting your own policy isn't easy or cheap but in some cases, it's well worth the effort. For more, see Buying Private Health Insurance.)
TUTORIAL: Intro To Insurance: Health Insurance
Overview of the System
Here's how vision care insurance works. You send the vision insurer a check for your premium (for individual plans) or have the premium deducted from your paycheck (for employer-sponsored plans). In exchange, you'll receive benefits such as discounted vision exams, glasses and contacts. Some plans also pay out if you are diagnosed with an eye disorder or if your vision becomes permanently impaired.
Some vision care plans require that you see a provider in the plan's network. Other vision care plans simply require you to be treated by an optometrist or an ophthalmologist - in other words, a vision care professional who has graduated from an accredited college of optometry and is licensed by the state or who has gone to medical school and is certified by the American Board of Ophthalmology. If you already have an eye doctor that you want to keep seeing, make sure their services will be covered by the plan you're thinking about purchasing. (For related reading, see What You Need To Know About Student Health Insurance.)
Whether you purchase your own insurance or get it through an employer, expect to pay somewhere between $5 and $15 a month in premiums for an individual. To add coverage for a spouse, domestic partner or child, you may pay slightly less per person than the plan's individual rate. If your employer offers vision care insurance, you may only have one opportunity per year to sign up during the annual open enrollment period. Be aware that some individual plans charge a one-time enrollment fee in addition to a monthly premium.
Regardless of whether you obtain your coverage individually or through work, make sure to consider the policy's total annual cost and compare that cost to your anticipated annual vision care expenses. You don't want to pay out more than you expect to receive.
Each plan covers a different set of expenses. Before signing up for any plan, check to see if it covers everything you expect to need. Bare-bones plans usually cover only eye exams, contacts and glasses and may function more like discount plans than insurance. More comprehensive plans don't stop at exams and vision correction; they also help with the costs of eye surgery, eye diseases (e.g., diabetic retinopathy, retinal detachment, retinitis pigmentosa, cataracts, glaucoma, macular degeneration) and permanent vision impairment. Most plans also provide discounts on laser eye-correction surgery.
The amount of an eye-related expense that a vision care plan will cover differs significantly from plan to plan. One plan might charge you a $10 co-payment for an eye exam and cover the difference. Another plan might pay for $35 of your exam and expect you to pay the rest. Also, if a plan does offer coverage for eye surgery or permanent vision loss, it may not be anything like the coverage you're used to getting from health insurance. For example, if you need eye surgery for glaucoma (an optic nerve disease that gradually causes blindness), you won't pay an annual deductible of $200 for the procedure and have the remainder covered by vision insurance. Instead, your insurance might simply give you a flat payment of $1,000 for the surgery, and leave the rest up to you. This system might sound stingy, but it has a bright side - by placing greater responsibility on patients to cover their vision care costs and shop around for the best value, insurance companies can charge their customers lower premiums. (For related reading, see Fighting The High Costs Of Healthcare.)
We've already touched on some of the limitations of vision care insurance. Here are some additional factors to consider when deciding whether to purchase coverage.
How does the insurance policy define the scope of a covered eye exam? If you visit an eye doctor who includes services in the exam that the plan does not cover, you will have to pay for them.
The plan might cover glasses lenses, but only basic lenses - if you want lightweight or anti-glare lenses, you'll pay all of the extra cost.
The plan might cover frames but only up to a certain amount, so if you want a pair of $250 frames, only part of your cost will be covered. Or the plan might cover the retail markup of the frames and require you to pay the wholesale cost.
All benefits are not necessarily available once every 12 months. They might only be covered over a longer time period, such as once every 24 months.
Some plans will only cover glasses or contacts, but not both, during the same benefit period. If you wanted to update both your contacts and your glasses, you would have to get contacts one year and then get another eye exam and choose the glasses benefit 12 or 24 months later.
Some plans have waiting periods that can range anywhere from 30 days to 36 months. During the waiting period, you will receive reduced benefits or no benefits. The purpose of the waiting period is to prevent people from waiting until they have an expensive problem to sign up for vision care insurance. The way insurance companies are able to pay benefits when people need them is by spreading risk among a large group of people, some of whom are healthy and some of whom are not, and all of whom will experience problems at different times. Insurance companies need the premiums from healthy people to pay the expenses of unhealthy people.
- Fortunately, unlike health insurance, having a preexisting condition will not make it impossible for you to get vision insurance. Unfortunately, the pre-existing condition itself may not be covered. (If you bring a pre-existing condition to a new insurer, you may find yourself without coverage. For more, see Health Insurance: Paying For Pre-Existing Conditions.)
Do You Really Need It?
Before you sign up for vision care insurance, get your hands on a copy of the detailed plan benefits and read it thoroughly. Find out what products and services are covered, how much coverage is provided and what expenses are excluded. Are there co-payments? Is there a network, and if so, what is the difference in coverage between in-network and out-of-network providers? In other words, how much total coverage are you getting? Do certain benefits have lifetime maximums?
Also look at how much vision care insurance will cost you per year and how that amount compares to your annual vision care expenses if you were to pay out of pocket. Then go beyond one year and look at a multi-year period, say two to five years. If there are years when you don't use your insurance benefits at all, that can really affect your cost/benefit analysis. Many adults don't need new glasses every year or even every two years, for example.
Alternatives to Vision Care Insurance
If vision care insurance sounds too complicated, you don't think you really need it, or you're not sure if it will pay off, it's OK to skip it. Unlike skipping health insurance, skipping vision insurance isn't likely to land you in bankruptcy court or put your life in jeopardy.
There are a number of ways to get discounted vision care without purchasing vision care insurance. Big-box retailers like Costco and Walmart have optical centers in some of their stores. The centers offer exams by licensed optometrists. They also sell reasonably priced glasses and contacts. Exam costs vary by location because the optometrists who staff them are independent of the retailers. Walmart lets you look at glasses frames and their prices on its website. The store also accepts vision insurance.
If you're not terribly particular about your glasses frames, you can order a complete set of glasses through an online retailer at a stunningly cheap price (for example, how does $6.95 for both lenses and frames with $5.95 shipping sound?). Some online stores will let you send them a pair of frames and have them add the prescription lenses. Discounted contact lenses are also available online. You'll still need a prescription from an eye doctor when using these online services.
If your employer offers a flexible spending account, you can use tax-free contributions to pay for your medically necessary vision care expenses. Health savings account funds can also be put toward approved vision care costs. See IRS publication 502 for a list of expenses that you can pay for with FSA and HSA funds. (For related reading, see Long-Term Care Insurance: Who Needs It?)
Does Buying Vision Care Insurance Make Sense?
Deciding whether to purchase vision care insurance can be tricky - it's not unilaterally a good or bad deal. Whether it makes sense for you to purchase a policy depends on a number of factors, such as the policy options you have to choose from, the types of vision care products and services you need and how frequently you need them. To make sure you're getting a product that will be valuable to you, do the research and the math before you sign up. (For related reading, see Why buy health insurance when your parents' policy can cover you? For more, see Health Insurance Tips For College Students.)