The Fraud of Eyecare Insurance
Let’s face it...eyeglass insurance companies are in business to make money. They do this by taking money from either you and/or your company but more often they take it from the Optician. Their theory is that; “The Optician will lose money on every pair of eyeglasses, but they’ll make it up in volume”. It’s a fraud.
Today, most eyeglass insurance is given to employees to make them “feel good”. It is often a "freebee" that is designed to make the employee feel like he or she is getting something nice from their employer. However, upon close inspection of the eyeglass benefit package, you’ll quickly find that these types of insurances have little real value.
To be fair, a few of you, very few, may be very fortunate...having a Cadillac program that allows you to get most anything you want, with little out-of-pocket cost to you. Unfortunately, most of you will not be that lucky.
Eyeglass insurance programs are naturally designed to make money for the insurance company.
How They Do It
The vast majority of insurance programs are designed to drive the customer into very low cost, poor quality and frankly unacceptable lenses and frames. An important element of this scheme is to pay the Optician so little that the actual cost of materials is barely covered.
In the distant past, some eyeglass insurance was a fair deal. But today, with ever increasing pressures to enhance insurance company profitability, this is no longer the case.
The Situation Today
Over the last several years, many insurance companies have changed their eyeglass programs by turning them into discount programs. The insurance company still takes your premium or the premium your employer pays...then looks to the Optician to give the customer a very deep discount.
So, the insurance company gets paid for what...the Optician giving an insured a discount...really? The insurance company pays the Optician nothing. No money is provided from the insurance company for the services an Optician provides. Again, the theory is; “The Optician will lose money on every pair of eyeglasses, but they’ll make it up in volume”. Hmmm, how is that reasonable business for anyone except the insurance company?
Now let's discuss non-discount insurance programs. Often these programs dictate that a customer must choose from a designated group of frames and lenses. While this might not sound so bad; quite often the quality of the “designated insurance frames and lenses” are quite low. Providers MUST carry these designated items in order to accept this type of insurance.
This is how it works; first at eyeglass frames level. The insurance company dictates to the Optician that only "their" eyeglass frames can be offered to the customer. These frames are always “discontinued” or “seconds” or “thirds” of dubious quality. The insurance company charges the Optician 50 cents a piece for these frames. Then, depending on the exact insurance program, these frames are either given to the consumer, free of charge, or sold to them for up to $90. A 50 cent frame is a very poor quality frame and has no place in Eyeballs’ inventory.
Regardless of what you end up paying for this type of "insurance program frame," it ends up being too much money for a poor quality, unreliable frame.
When the customer chooses not to select from the “designated insurance frame box,” the insurance company will only give you a small amount toward your chosen frame.
As to lenses, generally eyeglass insurance programs pay for basic plastic lenses without any coatings. This can be fine for customers with very light prescription powers; who never drop their glasses and never clean the lenses when dry. These types of customers are few and far between. Lenses that do not fall into the "vision program" category are not covered by the insurance company. You, the customer is then responsible for the total cost of those lenses.
A relatively new hurtle that Opticians are encountering is the mandatory use of the insurance company's own lens manufacturing lab. Now this is scary...what does an insurance company know about making lenses? If it's anything like their ability to pay their claims promptly and correctly...we've all got a problem.
These insurance labs are often very slow in their lens production time. In addition, these "mandatory labs" come with added, unseen charges. You see...Opticians get billed, by the insurance company itself...not the lab...for our insurance customer's lenses.
My experience, with this unfortunate mess, has been rather unpleasant. The insurance lab billed the insurance company $73 for my customer's lenses. In turn, the insurance company then marks-up the lens and bills me $149.00 for the same lenses.
Why am I paying the insurance company an additional $76 for lenses that they never even touched? So not only is the insurance lab slower but the cost, to the Optician, is significantly more expensive as now the insurance company sees fit to tack on added costs. Why do they do this ...because they can.
Hmmm...So the insurance company is now trying to make money off of the Opticians as well as the insured.
Understand that Opticians are basically handcuffed by these types of insurance programs; often times we are forced to compromise our standards to appease the insurance company. In most cases, the amount an Optician receives from the insurance company and the insured consumer combined, does not cover the direct cost of materials for the insured’s eyeglasses.
Our bottom line… we will not compromise our quality standards to please insurance providers who provide no service to their customers.