By Andy Kearns (lendedu.com)
Getting a regular eye exam along with updated glasses or contacts can be an expensive endeavor every year or so. The average cost of an exam is around $200, while new frames can range between $100 and $500, depending on the designer and prescription. Contact lenses average between $220 and $260 per year. All these eye health expenses add up fairly quickly, but vision insurance may be able to help.
With the right plan, the cost of an eye exam, corrective eye surgeries, contact lenses, and glasses may be covered or reimbursed up to a point. It’s important to know how it works, what it costs for coverage, and what eye health necessities are included in policy benefits.
HOW DOES IT WORK?
Similar to other insurance policies, vision insurance is provided by an insurance company in exchange for receiving a monthly or annual premium from the policyholder. If you purchase a private insurance plan – one that is not included in employer-sponsored health coverage – you pay the insurance company directly for your policy. When it is offered through an employer as an employee benefit, premium payments, if any, are paid through paycheck deferrals, much like other benefits or retirement plan contributions.
When vision insurance is in place, you may pay out-of-pocket for routine eye exams, optometrist visits, eyeglasses, or contact lenses. However, the insurance plan may pay reimbursement to you, up to the limits of the policy. In some cases, it does not involve reimbursement but instead, provides a discount on the total cost of eye doctor expenses up-front, reducing your out-of-pocket expense immediately. In either case, vision insurance can reduce the total amount paid for your eye health needs.
HOW MUCH DOES IT COST?
The average premium ranges from $10 to $20 per person, per month. However, several factors go into determining the cost of coverage. Individuals who have insurance through an employer-sponsored health plan may pay less if the company subsidizes a portion of the premiums due. Those who pay for insurance on their own may have higher premium costs.
Policies also differ in cost depending on how many people in a household are covered under the plan. An individual will pay less than a family of four, for instance. Similarly, selecting a plan with a low or no deductible, minimal co-pays or co-insurance, or high benefit amounts each year will be pricier than a policy with fewer benefits and higher out-of-pocket costs.
WHAT IS COVERED?
With a typical vision insurance policy, coverage includes a comprehensive eye exam once per year or every two years. This may be provided at no cost to the insured, or a steep discount to the policyholder. Some insurance plans also provide discounts for contact lenses and frames, as well as laser vision correction procedures such as LASIK Lasik procedures. The most comprehensive plans may also provide coverage for eye diseases, such as diabetic retinopathy, retinal detachment, and glaucoma.
TYPES OF INSURANCE PLANS
There are four common types of vision insurance plans: indemnity plans, health maintenance organization plans, preferred provider organization plans, and discount plans.
Indemnity insurance plans allow you to select an eye doctor to complete your eye exam or other eye health needs. The plan then pays for some of all of your care directly to the optometrist.
With a health maintenance organization plan, also known as an HMO, benefits are paid if you visit an in-network provider for your eye appointments.
A preferred provider organization (PPO) pays for insurance benefits with either in-network or out-of-network providers, but the price paid for benefits from the insurer may be lower than other plans.
Finally, vision discount plans are not technically insurance plans, but instead, they provide upfront discounts on routine vision health expenses with participating eye doctors.
Indemnity, HMO, and PPO vision insurance plans are considered insurance benefits packages. These pay the provider for a portion or all of the covered expenses with visiting the eye doctor. Discount plans, on the other hand, only provide a discount to services received. Benefits packages for vision insurance are often more comprehensive than discount plans, although they may cost more in terms of the monthly or annual premium.
HOW TO CHOOSE THE RIGHT POLICY?
When possible, shop around. Compare quotes and coverage options from multiple insurers, particularly the cost, covered benefits, and any limitations. Some policies restrict the total amount of benefits paid out on an annual basis, while others may limit the types of contact lenses, frames, or other procedures that are covered.
It is also essential to select a plan that best meets your eye health needs. If you don’t go to the eye doctor often or don’t have corrective lenses or contacts, a discount plan may be more cost-effective than a more comprehensive insurance package.
Alternatively, those with known vision health expenses each year may benefit more from a formal insurance policy compared to a discount program. You’ll also want to consider your needs for individual or family coverage, and the savings you may receive with each type of plan before making your decision.
Andy Kearns is a Content Analyst for LendEDU and works to produce personal finance content to help educate consumers across the globe. When he’s not writing, you can find Andy cheering on the new and improved Lakers, or somewhere on a beach.
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