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Selling vision insurance is a great way to offer a diverse and attractive portfolio of products. What if there was an even better option you could recommend for budget-conscious customers interested in eye health?
We’re talking about pre-paid vision care plans, a flexible and cost-effective alternative to traditional insurance that costs less but still gives your customers access to essential services like annual eye exams and eyewear.
Here’s some insight into how pre-paid vision plans differ from traditional vision insurance – and why they belong in your portfolio.
How Does Traditional Vision Insurance Work?
When customers buy a vision insurance plan, the insurer charges them a monthly or annual premium. In exchange for these premiums, the plan covers specific services. Eye exams are common, but vision insurance plans usually cover prescription eyeglasses and contact lenses as well.
Some plans have additional perks, like discounted rates on services like LASIK surgery and other treatments. The more services the plan covers, the higher the premiums (and the commission the insurer pays you).
Out-of-Pocket Costs and Plan Utilization
Vision insurance comes with other costs beyond premiums. Customers face a wide range of additional costs – such as co-pays and deductibles – which result in higher out-of-pocket expenses. As the cost of eye care increases, they might become less likely to seek the services they need.
In addition, customers might have a hard time understanding the pricing structure. Receiving an unexpected bill at the optometrist’s is not ideal and can reduce customer satisfaction.
For customers who decide against using their plan, premiums quickly turn into a recurring expense with few benefits. These customers are unlikely to renew their vision coverage and will come away from this whole experience with a negative impression.
What does it mean for your business? A bad experience with traditional insurance leads to a low renewal rate. Instead of benefitting from renewal commissions, you must focus on new customer acquisition, which costs more than retention. Ultimately, you’ll see your costs go up, and your profits shrink.
The Problem with Lab Contracts and Low Reimbursement Rates
Many vision insurers contract with specific labs, even though some states have laws to protect consumers from this practice. This means many plans limit customers’ options. If an insurer has a contract with a lab, your customer will have to get their glasses from that lab, even if another lab offers a cheaper or better option.
You should also know that traditional vision insurers tend to offer low reimbursement rates for optometrists. These rates don’t align with inflation and make it difficult for optometrists to grow their practices.
Low reimbursement rates devalue the services optometrists offer. Investing in new treatment technologies and hiring more staff becomes difficult. In short, low rates limit growth opportunities for optometrists, contributing to a disappointing care experience for your customers and further reducing the value of the insurance plan they purchased.
Pre-Paid Vision Care Plans: Are They a Better Alternative to Traditional Insurance?
Yes. Brokers offering pre-paid plans stand out by presenting a straightforward, flexible, and budget-friendly alternative to traditional vision insurance care plans.
How Do Pre-Paid Vision Care Plans Work?
Customers pay an upfront fee when buying the plan. In exchange, the plan gives them access to savings on eye care services for a set amount of time. They can renew your plan at the end of this period, resulting in recurring fees similar to premiums.
However, pre-paid vision care plans don’t reimburse the patient or the optometrist. Instead, customers get a discounted upfront price for eye exams, new glasses, contacts, and other services.
The pricing structure doesn’t include deductibles or allowances. It’s a straightforward model, and your customers know exactly how much they’ll pay when visiting an optometrist. With clear pricing, budgeting for vision care is easy – and customer satisfaction will increase. Customers will be more likely to actively seek care and keep up with annual eye exams, resulting in higher plan utilization and enhanced satisfaction.
These savings are available via optometrists who accept the pre-paid plan. Like traditional insurance, perks won’t apply outside the plan’s network. That’s why offering pre-paid plans accepted by local optometrists is important.
How Pre-Paid Plans Offer Better Value
One of the best things about pre-paid plans is the savings – they often provide better deals than traditional insurance, as long as your customers stay within the plan’s network.
Pre-paid plans are flexible. Some plans only cover essential services, helping customers save on annual exams. Others cost a little more and come with pre-negotiated savings on additional services. You can also offer plans designed for children or senior citizens, with savings on the services your customers will most likely need.
This flexibility allows for a higher level of personalization. Because it’s easy to pick a plan with savings on the services your customers need, they’re not paying for things they don’t need – and generally getting more out of their purchase.
Pre-paid plans work closely with optometrists to negotiate savings and find price points that work for everyone. For optometrists, pre-paid plans mean offering competitive pricing to patients. As more patients come in, revenues go up, which supports practice growth and leads to a better quality of care for your customers.
Explore Flexible and Budget-Friendly Pre-Paid Vision Plans From VCD
Vision insurance isn’t the only way to save on eye health care. Pre-paid plans are often a better alternative, with fees lower than insurance premiums and a clear pricing structure with pre-negotiated savings on essential services.
Besides offering flexible and affordable plans to your customers, you’ll benefit from working with a plan that supports your local optometrist and helps them grow.
Brokers earn a flat 10% commission on VCD products and stand out from the competition by offering high-quality local plans. Learn more about joining the VCD family as a broker!
Summary: What makes pre-paid vision care plans different from traditional vision insurance? We look closely at the key differences and explore which option brokers should recommend.
