 Personal Finance PowerPoint Presentation. Decision to Purchase Vision Insurance. Prepare to get financially fit by practicing personal finance. Insurance is part of our overall risk mitigation strategy where we follow the adage of measure twice, cut once, putting a formal process in place, looking something like set the insurance goals, develop a plan to reach them, put the plan in action, and then review the results, and repeat the process periodically. Most of this information can be found at Investopedia. Is vision insurance worth it? What you should know, which you can find online. Take a look at the references, resources, continue your research from there. This is by Amy Fontenille, updated May 25th, 2021. In prior presentations, we looked at insurance in general. We then moved to the medical insurance, which can be more confusing for reasons we'll state shortly, and then we moved to dental and now vision, which have some components and some overlap with the medical insurance. Remember that the classical insurance, liability insurance, property insurance, and life insurance are typically safeguarding us, lowering the risk in the event of an event that might happen in the future, but we're hoping it doesn't happen. Possibly the likelihood of it happening being low, but if did, it would be financially devastating, such as we die prematurely. We get sued for millions of dollars or our house burns down or something like that. With the medical insurance, you have a similar characteristics because you could have a big disease or something that comes suddenly and that could be financially devastating and the medical insurance often has that out-of-pocket kind of cap where the insurance company will kick in over and above that, which can safeguard in a similar kind of fashion, but it also has that preventative kind of stuff involved in it as well. When we move to the eye and the dental, then there's some overlap in terms of what's gonna be covered by medical and what's gonna be covered by the eye and dental, and the eye and the dental are often gonna be things that are more kind of predictable in nature. So you might be doing less strategy for that big event of risk mitigation because that might be under the basic medical kind of plan and trying to think about how can I safeguard against or how can I basically lower my costs for something like my vision care and possibly use it to help me to kind of mitigate the overall risk if I was to have a more significant kind of problem with my eye care. Okay, is vision insurance worth it? What you should know. So we all know health insurance is something you shouldn't live without, but what about vision insurance? So you can purchase vision insurance as a group benefit through your employer or as an individual policy, but how does the cost compare to the coverage you'll receive? How vision insurance works? So when you have vision insurance, you send the vision insurer a check for your premium for individual plans or have the premium deducted from your paycheck for your employer sponsored plans. So if you've got your healthcare through your employer, then they might set it up in a withholding kind of setup. If not, and you wanted to purchase it separately, then of course you'd have to be paying the premiums, but you'd be paying the premiums or someone would be paying the premiums either way. In exchange, you'll receive benefits such as a discounted vision exams, glasses and contacts. Some vision care plans require you to see a provider and the patient's networks. You might have that similar network situation that gives you some restrictions possibly in terms of your options on who you can be using for your vision care. So other vision care plans simply require you to be treated by an optometrist or an ophthalmologist. So in other words, you must visit a visit 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. Okay, purchasing a plan. If you already have an eye doctor, you want to keep seeing, make sure their services will be covered by the plan you're thinking about purchasing. So clearly same kind of thing with the dental, same kind of thing with the medical. You might first think about who is my current person I'm going to for my eye care. Are they covered in the network? And then think about the network or the eye care that you want to be purchasing in terms of insurance. Or you might say, well, I'm gonna purchase the insurance maybe through my employer. I might be limited to the insurance I can purchase. And then think about which eye care I could go to what resources are available to me within the network that I'm purchasing in that fashion. So whether you purchase your own insurance or get it through an employer, basic vision care plans range from $5 to $35 a month in premiums for an individual to add coverage for a spouse, the best partner or child, you may pay slightly less per person than the plan's individual rate. If your employer offers vision insurance, you may only have one opportunity per year to sign up during the annual open enrollment period. Be aware that some individual plans change a one-time enrollment fee or they charge a one-time enrollment fee in addition to a monthly premium. So to sign up, it might cost you a bit more to sign up. So regardless of whether you obtain your coverage individually or through work, compare the policy's total annual cost to your anticipated annual vision care expenses. So notice the recommendations here are basically more towards, hey, what do you think you're gonna actually save money on the maintenance kind of services, the checkups and whatnot that you're gonna have for vision as compared to the traditional insurance, which is more like, if you're talking about liability insurance, you're saying you're gonna try to safeguard against an event you're hoping doesn't happen, right? So it's a little bit different the way that's kind of structured. And again, for partially that's because the vision and the medical have some overlap. So if you had like an accident or you had some big disease in your eye, the question would be, is it covered by medical or vision? The vision often is there to cover the more routine stuff. The more routine stuff isn't safeguarding against the risk so much that you're hoping doesn't happen, but may, but is covering the stuff that almost clearly is gonna happen at some point in our lives if we get old enough for that to be the case. And we might have more eye care or less eye care. And then we might be using the insurance to pay or mitigate or lower our costs of that eye care as opposed to a classical risk mitigation strategy of something that we hope doesn't happen that might happen in the future. So you don't want to pay out more than you expect to receive. So how much could you save with vision insurance? Generally the only eye care covered by regular health insurance is care that a major eye injury or other major medical problem necessitates. So in other words, that big event of getting in an accident or something like that might be covered over the medical side of things whereas the eye care insurance might be covering more of the types of things that would be the preventative stuff and the more routine kind of activities like the eye care insurance, the eye care insurance might be covered by regular health insurance. So that would be the eye care insurance the more routine kind of activities like the contact lenses and your checkups and updating your glasses and whatnot. Within vision insurance, you're responsible for paying the full price for eye exams and any initial or replacement eye glass, lenses, frames and or contacts. Generally insurance companies offer two types of vision insurance benefits packages that give you access to a capped dollar amount of services and products and discount plans simply give you a predetermined discount such as 20% on qualified services. So the amount of savings generated by your vision plan will depend on how many new products and services you purchase in a year. For example, according to the vision service plan the national average cost for the following products and services are as follows $206 for an eye exam, $114 for a single lenses for single lens and $242 for frames amounting to $562. If you purchase a basic discount plan that covers $5 per month and that provides a 30% discount on all services and products you would save about $108. Of course, plans and expenses vary however expect to save between $100 and $200. So if you're buying the insurance obviously to try to save on your routine kind of eye maintenance then if you have more maintenance that you need such as contact lenses, glasses and so on those can obviously be more costly and it might then if you get a discount on the covered items then you gotta think about the covered items that will be covered and the discount you'll receive versus the premium that you will have for the policy. So vision insurance and covered expenses. 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. So we've got the bare bones plans usually cover only eye exams, contacts and glasses and may function more like discount plans than they do insurance. So notice again when you're talking about some of the vision insurance you might think of it more as a way to try to reduce your costs for the normal expenses which isn't your normal classical thought for insurance like life insurance where you're trying to safeguard against dying prematurely or your home burning down or something. The amount of eye related expenses a vision insurance plan will cover differs significantly from plan to plan. One plan might charge you a $10 copayment for an eye exam and cover the difference. Another plan might pay for $35 of your exam and expect you to pay the rest. So notice the different structure that they have with regard to the plans and this might be because there's a looser kind of relationship within the network it seems for the eye insurance. So it might be more difficult to kind of set what the prices will be amongst different people that are providing the exams. So you might see that they get that set payment amount of the $10 or they might say that we'll pay this amount and then you gotta pay above that so it'll depend on the plan. So also 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. Once again, 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. Example of vision insurance. The largest vision insurance provider in the United States is VSP Vision Care funded in 1955 by a group of optometrists. VSP currently has 88 million members and more than 40,000 doctors in its network. VSP Vision offers two types of plans. We got the standard and easy options for the standard plan depending on your zip code. Monthly premiums start at just $13 with an eye exam copay of $15 covering up to $150 in new frames. Though it does not cover a Lasik you can receive a coupon for an average of 15% off of your services. The easy options plans is a bit more expensive at around $24 a month. This plans has all the same benefits of the standard does but allows members to customize their benefits package by allocating more money toward the products they use more often. So we have the vision insurance plans limits. The limits we've already touched on some of the limitations of vision insurance. Here are some additional factors to consider when deciding whether to purchase coverage. So the plan might cover lenses for glasses but only basic lenses. So if you want the super fancy lenses then possibly not. If you want lightweight or anti-glass lenses you'll have to pay 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. So if you get in the glasses and the glasses are covered and you want the super cool brand name frame then you might have to pay a bit more. So the plan might cover the retail markup of the frames and require you to pay the wholesale cost. 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 glasses you would have to get contacts one year and then get another eye exam and choose the glasses benefits benefit 12 or 24 months later. So in other words, if you've got an eye problem and you need glasses, then you might want contacts but you might want contacts and glasses so that you can wear your contacts when you don't want your glasses to be worn and then wear your glasses like at home or something. But you can't get both at the same time but you might be able to do two separate exams and then get the coverage of the glasses and the contacts that way. So some plans have waiting periods ranging anywhere from 30 days to 36 months. During the waiting period you will receive either reduced 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 the vision insurance. We saw the similar kind of thing with the dental insurance. So you might say, well, what if I need that lazy guy surgery or something and I sign up for the plan and then I do all this expensive stuff. I buy my contact lenses and whatever and I get the surgery right after I bought the plan. Wouldn't that be defeating the purpose of insurance? Because the insurance is supposed to be saying that would be like getting car insurance after you got in a car accident to cover the car accident, right? So how are they gonna safeguard against that? They could give you an exam and do the pre-existing condition thing or they could say, well, we're just gonna have a waiting period so that you can't just jump in and then do the procedure. So that kind of thwarts that strategy. If you're thinking about that strategy just gonna wait and buy the insurance right before you have a problem then they're gonna try to stop you from doing that. So the way insurance companies are able to pay benefits when people need them is by spreading risk among a large pool of people. Some members are healthy and some are not. However, most will experience some issue and at different times. Insurance companies need the premiums from healthy people to pay the expenses of unhealthy people. So that's the point. It's a numbers game. You got more people in the pool than they can predict from big numbers what the average cost is gonna be for them to be paying out and that's how they're gonna have to calculate their premiums. If you got a bunch of people jumping into the pool and they're all sick already then that screws the calculation in terms of how the premiums are gonna cost it would result in higher premiums. So fortunately, because the benefits of vision insurance are limited to vision correction products and services as well as eye exams unlike health insurance, having a pre-existing condition will not raise your monthly premium. Alternatives to vision insurance. If vision insurance sounds too complicated you don't think you really need it or you're not sure if it will pay off it's fine 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. So notice again, when you're looking at other kinds of insurance like life insurance you gotta safeguard against that because you're hoping you don't die prematurely but if you did it could be a catastrophe to your family and that's the point. If your home burnt down and you didn't have the property insurance that could be financially devastating. If someone sues you for millions of dollars and you don't have millions of dollars that could be a problem. With a vision it looks like some of the big cost items might be in the medical area and so you're gonna think okay, well maybe those things will be covered by the medical the vision looks like it's gonna be more like the routine maintenance and wear and tear type of stuff which doesn't look like there's that big item that big thing that big event or sickness that could push you over into bankruptcy due to medical bills is there just in my interpretation of what they're saying here. There are a number of ways to get discounted vision care without purchasing vision insurance. Big box retailers like Costco and Walmart have optical centers in some of their stores. The centers offer exams by licensed optometrists and sell reasonably priced glasses and contacts. Exam costs vary by location because the optometrists who staff them are independent of the retailers. So Walmart lets you look at frames and their prices on its website. So if you're not terribly particular about your frames you can order a complete set of glasses through an online retailer at a stunningly cheap price. For example, how does $6.95, $6.95. So that sounds great for both lenses and frames with $5.95 shipping sound. That's, I want some frames right now. Some online stores will let you send them a pair of frames and they will add the prescription lenses. So then you can actually get your custom frames and you say put my lenses in that frame. Discounted contact lenses are also available online. You will still need a prescription from an eye doctor when using these online services. What vision insurance does Costco accept? Costco optional accepts most major vision insurance plans. However, these plans vary depending on the Costco location. Discount plans are not accepted. So what vision insurance does Walmart accept? Walmart accepts most vision insurance plans but only for eye exams Walmart offers its own vision insurance for customers wishing to purchase lenses, frames and contacts. Does vision insurance cover vision therapy? According to the Vision Therapy Institute when insurance covers some of the costs for vision therapy it is covered by health insurance, not vision insurance. What's the bottom line? Deciding whether to purchase vision insurance can be tricky. It sure can. It's not unilaterally 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 type 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.