How can a full-service plan save money?

In most retail experiences, getting more of anything typically costs the consumer more money. 

This is not the case with VSP^® Vision Care full-service vision plans, which offer significant, long-term savings to our Medicare health plan clients and their members. 

“What’s the catch?” you ask. 

There is no catch. 

VSP offers many types of plans for our Medicare health plan clients. The most common coverages are our exam plus allowance and full-service plans. 

Exam plus allowance plans cover the cost of a vision exam and supply the member with a material allowance to cover the cost of glasses or contacts. Costs are typically higher with these plans because: 

1.    The member’s material allowance is typically exhausted to cover the cost of glasses (corrective lenses, lens upgrades, and frame) due to this coverage being applied against a provider’s usual and customary (U&C) charges. This results in higher out-of-pocket costs for members. 

2.    Higher Member out of pocket costs lead to lower experience ratings.  

The Benefits of a VSP Full-service Plan
Like exam plus allowance plans, VSP full-service plans offer a covered routine exam and a frame allowance towards glasses, plus covers the cost of standard corrective lenses (e.g., single vision, bifocals, trifocals, or lenticular lenses). Full-service plans provide more coverage and more value, creating a more positive member experience.  

Costs are often lower with full-service plans for these reasons: 

1. Base lens materials are supplied at a discounted rate due to VSP lab contracts under full-service plans. This translates to lower claims costs for health plans and lower out-of-pocket costs for members. 
2. Members have a separate frame allowance they can use to select more desirable eyeglasses because they don’t have to worry about the allowance being needed to cover the base lens. In addition, members receive a 20% discount on any frame overage cost creating further savings.  
3. Members also receive average savings of 20-25% on desirable lens upgrades (e.g., anti-scratch coating, progressives, etc.). 

There is no “gotcha” moment for our Medicare health plan partners who elect to offer a VSP full-service plan to their members. We continue to provide full transparency into claims costs for our health plan clients. The primary key to the lower cost of a VSP full-service plan lies in the provider and lab contracts, which sets a negotiated reimbursement amount for both exams and materials. 

Case Study Example:
Significant Savings for One VSP Medicare Health Plan Partner

In one example, a Medicare health plan partner who switched from an exam plus allowance plan to a full-service plan saved $1.62 million in claims costs in just one year. This represented a 21% decrease in costs with no significant change in plan utilization or membership.  

Here’s a look at how the capped fees affected the health plan’s claims costs: 
•    Exam costs: decreased by 11.9%
•    Lens costs: decreased by 52.4%
•    Frame costs: decreased by 4%

In addition to saving Medicare health plans money, VSP full-service plans offer other benefits. These include: 

• Improved satisfaction ratings – VSP offers members lower out-of-pocket costs and delivers benefits that align with commercial plan offerings. This becomes apparent as it attracts baby boomers who are accustomed to the value of full-service plan offerings.  
• An expanded provider network – VSP offers provider choice to Medicare members with national access to hundreds of in-network vision providers in addition to the relationships VSP has with big retail providers including Walmart, Sam’s Club, Costco, and Visionworks^®. 

VSP full-service vision plans offer greater benefits, lower costs, and a better member experience. No catch. Contact us to learn how much you can save by offering your Medicare members a VSP full-service plan. 

Contact us to schedule a free consultation with VSP