When searching for supplemental health benefits like dental and vision insurance, be cautious of paying additional fees or joining membership associations tied to the insurance. VSP vision insurance, Delta Dental and AARP all have marketing agreements that mandate the purchase of an association membership or one-time fee. These associations may offer little value to the member and only serve as another revenue stream for the issuing company.
VSP forces enrollment in membership association
I was excited when VSP, Vision Service Plan, announced they were going to offer their popular vision insurance plan to individuals and families. Before the advent of the ACA, the high quality VSP vision insurance was available almost exclusively to small and large employer groups. Unfortunately, VSP has turned over the marketing of this stand-alone vision plan to Careington, a “premier marketer of dental and other health and lifestyle discount plans”, who has tacked on to the enrollment an association plan for $10 per year. There is no way to purchase the VSP insurance without joining the Consumer Choice Association.
What is the value of a discount association membership?
These membership associations that purport to offer discounts on a variety of goods and services border on being a scam. The better prices are usually nothing special and the “fine print” creates “gotcha” scenarios where the member can’t even access the alleged savings. In short, they are nothing more than an additional revenue stream for the marketing company who wants more than the commissions paid by the insurance plan.
Discount vitamins and long distance phone calls
VSP vision plan also collects demographic data for future marketing.
In the case of the VSP and Careington partnership the Consumer Choice Association offers discounts on prescription drugs, vitamins, travel, office supplies, gym memberships and…hold your breath…long distance telephone rates. All of these valuable discounts can be yours for the low, low annual price of $10 per year with your vision insurance. Really? While the discounts may be real, if you choose to pursue them, the $10 annual membership more than likely guarantees you to loads of unwanted junk mail and email spam encouraging you to buy, buy, buy.
Demographic data is a gold mine
The value of a consumer list with important demographic data gained through the honest enrollment of a vision, dental or health plan can’t be underestimated. The VSP-Careington application requires you to list your gender, marital status and ethnicity, all of which are immaterial to vision insurance. But, the demographic data is gold to marketing firms. AARP has a similar marketing and branding arrangement with UnitedHealthcare (UHC) for Medicare Supplement plans. In order to purchase an AARP branded UHC Medicare Supplement plan, the member must also join AARP. As an AARP member, I can attest to the scads of junk mail I receive from AARP officially branded partners.
AARP memberships generate spam and junk mail
Weekly I receive at least one or two direct mail solicitation from everything from car, life and hospital indemnity insurance to special rates on cellular phones with the AARP endorsed logo. AARP gets a cut of the action as stated on this UHC disclaimer for hospital indemnity insurance “UnitedHealthcare Insurance Company pays royalty fees to AARP for the use of its intellectual property. These fees are used for the general purposes of AARP.” The secondary, if not primary purpose, of the mandatory association enrollment is to generate a consumer data base of information to be sold.
Nonrefundable fee adds no benefits to vision or dental insurance plans.
Delta Dental one-time enrollment fee gimmick
If a company can’t mandate your enrollment in an association, they might charge you a fee for the privilege of purchasing vision or dental insurance. I was saddened to see a $35 one time set-up fee being added to the enrollment of vision and dental insurance through the website Dental for Everyone. The Morgan White Group which operates Dental for Everyone is a general insurance agency that lets independent agents like me sell the insurance products they market. While I make a commission from the sale of any of the listed dental and vision plans, I’m not sure how Morgan White is compensated. However, I get no part of the $35 set-up fee so that must be how they make their money.
Fees another source of revenue
I signed up to represent Dental for Everyone because it was the only way at the time I could offer Delta Dental and VSP insurance to my individual and family clients. Many specialty carriers for dental and vision insurance don’t like dealing with the individual market so they contract with general agents like Morgan White Group. Perhaps the additional set-up fee is just a reflection of the dwindling commissions all agents and agencies are seeing with new insurance plans.
Consider alternatives to popular name brand plans
If a family plans to keep the dental or vision insurance for many years because it is accepted by their optometrists and dentists, then the set-up fee will be negligible. But overall, I am opposed to any additional fee as a condition of sale for the purchase of insurance. It’s unfortunate that popular insurance carriers like Delta Dental and VSP allow the marketers of their products to saddle consumers with these associations and fees. There are alternatives as more health insurance companies are offering competitive dental and vision insurance and you don’t have to purchase a health plan, become a member of an association, or pay an additional fee to enroll.