Vision Insurance – A Quick Overview

Vision insurance is a supplement of health insurance that provides eye care benefits. Patients may receive routine eye exams and related routine procedures, such as cataracts and glaucoma screenings. Covered individuals may also receive discounts for eyeglasses and contact lenses. Procedures such as LASIK are often covered by vision insurance policies. Discounts for the refractive surgery procedure are often available through vision insurance coverage. Since vision insurance is a supplement to regular health insurance, regular insurance would protect the patient from financial loss, if a patient suffers a catastrophic eye injury.

How to Obtain Vision Insurance

Individuals may obtain vision insurance from a variety of sources. Many individuals who have health insurance through their companies, school district, Medicare, Medicaid, or private association may also obtain vision insurance through the same organization. Vision insurance may be added as a supplement to health maintenance organizations (HMO's), preferred provider organizations (PPO's) and indemnity health insurance.

Vision Plans and HMO's

Patients enrolled in HMO plans are allowed access to physicians, hospitals and laboratories available in the network of HMO providers.

Vision Plans and PPO's

Patients enrolled in a PPO will receive healthcare at a fixed discounted rate. With this program, patients will have the option to select a provider outside the network, but for a more expensive price.

Vision Plans and Indemnity Health Insurance

Indemnity health insurance will allow the patient to select any optometrist they choose.

Patients enrolled in a vision care insurance plan may have to pay a small amount or co-pay each time they visit the ophthalmologist. Some of the insurance plans will also require meeting the deductible requirement before the insurance benefits become effective. Most eye wear will be offered at a discounted rate.

How Much Does Vision Insurance Cost?

Vision insurance is not very expensive through most plans. Most individuals pay $50 per person annually through a HMO, PPO or other insurance provider. Many employers will contribute 25% to 50% of the total annual premium. Some patients are required to pay up front and then are reimbursed for the expenses from their insurance company.

In general, the cost of vision insurance varies based upon the insurance company, the program’s design, state of residence and employer’s financial willingness to supplement costs.

For example, a vision care insurance provider offered the following rates to New York residents in 2009:

• Routine Eye Exams: Insurance covers all costs after $15 co-pay.
• Eyeglass Lenses: First pair covered in full after $25 co-pay.
• Eyeglass Frames: Insurance will cover up to $120 and offer a 20% discount for any expenses after the $120.
• Contact Lenses: Insurance will cover up to $120 for contact lens exams and lenses.
• Other Discounts: Insurance will offer a 20% to 25% discounts for an extra pair of glasses and lens options.
• Annual Membership: Singles pay $178.95 annually and families pay $436.95 annually.

These rates are slightly more expensive than most companies. However, this plan is not associated with an employer’s insurance program.

Some insurance companies will offer a discount plan. These plans require half or less than half the annual premium of the full benefits program and provide a discount for eye exams, eyeglass lenses, eyeglass frames, contact lens exams and laser vision correction. The discounts range from 15% to 20%.

Experts recommend researching various vision insurance providers to find the best coverage at the most affordable rate. Just like it is key to compare car insurance from many different companies in order to find the best rates it is also just as important to shop around to find the best vision insurance rates. Individuals on group vision insurance will typically pay through payroll deductions. Others will pay for their health expenses through a flexible spending account (FSA's). FSA's allow employees to save money tax free and pay for vision insurance without being subject to taxation. Individuals who have individual vision plans because they are self employed will pay annually or monthly.

How Can I Lower the Costs of My Vision Insurance?

Defined contribution plans are self-directed health plans that allow individuals to customize their health care programs to suit their needs. Vision benefits are paid for through a fund that is established before taxes from federal, state and social security are removed from the account. By paying for vision care with income before taxes are removed, individuals are allowed to save money on their insurance. Furthermore, the patient only pays for the benefits that he or she will need rather than benefits that are not relevant to the patient’s health situation. This is an additional savings.

Health reimbursement arrangements (HRA's), health savings accounts (HSA's), and cafeteria plans are all plans that assist individuals in saving money on their health insurance. Cafeteria plans and flexible spending accounts both allow individuals to save money tax-free to cover vision expenses. However, in both scenarios, individuals lose the money if they have not used the money by a certain period of time.

Health reimbursement arrangements also allow patients to save money tax-free. However, the savings will not be lost if the money is not used. Each year, the money will be added to the next year’s contribution if the amount is not used. The funds in an HRA may be used to cover health insurance premiums and other qualified vision expenses. Individuals may select the benefits that matter most to them. Some employers will match the employee contribution in the account. The contribution may be deposited monthly or annually.

When the money is withdrawn, the money is not subject to income taxes if it used on medical expenses. The money in an HRA does not earn interest, however. Some employers require the patient to purchase a high deductible insurance when using an HRA. This will lower monthly premiums and require the patient use the money in the HRA to cover the deductible if needed.

Health Savings Accounts are also desirable for use with high deductible insurance. Self-employed individuals may also establish a HRA. These accounts may be opened at a bank or other financial institution where money may be saved tax-free and withdrawn only for the purpose of health expenses. Only $3,000 each year may be withheld tax-free for a single person and $5,950 for a family, according to 2009 Internal Revenue Service rules. Individuals must have an insurance policy with a deductible of at least $1,150 for single coverage or $2,300 family coverage to qualify. Each year, the individuals may only spend $5,800 out-of-pocket expenses for a single person or $11,600 for family coverage. Individuals who are dependents or are on Medicare do not qualify.

Medicare and Vision Insurance

Many individuals are confused about the different plans offered through Medicare. However, individuals can receive different vision coverage based upon the plan type. For instance, Part A of Medicare covers eye emergencies and trauma to the eye, but not routine eye care. This portion will also pay for related homecare expenses. Part B of Medicare covers eye diseases and doctors visits, but not routine eye exams.

With Part A and B coverage, glaucoma screenings may be obtained every 12 months if the patient has a history of diabetes, glaucoma, is an African American over the age of 50 or a Hispanic over the age of 65. Ophthalmologists will measure intraocular pressure, dilate the pupils and give a comprehensive exam. Cataract surgery and eyeglasses after the surgery may also be covered in Part A and Part B.

Part C or Medicare Advantage covers some routine eye exams, eyeglasses or contact lenses. The premiums are typically higher but patients receive more coverage. Part D will cover prescription drugs related to glaucoma disease or other eye problems. Medigap policies will cover any expenses not covered by Parts A and Part B of Medicare.

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