It's not actually insurance, it's a payment plan. Insurance is meant to cover unexpected events, with this you pay a monthly fee for "insurance" which gives you the right to buy the glasses later for a normal price.

The other companies you mention are actual insurance: They cover rare, and unexpected events. As opposed to covering once every two year glasses, on a schedule.

Then what is wrong with a business offering a payment plan?

The deception. False advertising is a crime for good reason.

What is the deception?

The deception is that glasses cost a lot, and you need insurance to help with the cost.

In truth the insurance is just a scam because glasses cost 1/10th what they say.

Now that would be OK if there was actual competition, but there isn't, they are basically a monopoly - as soon as a competitor arises they buy them.

Online glasses are not the same market as a physical store where you can try them on.

Everyone who goes to Walmart (majority of the US?) sees this section at the front of the store when they walk in or out:

https://www.walmart.com/browse/health-medicine/prescription-...

I see lots of $30 and $60 options.

The insurance is only a thing because the tax code allows it as a way for employers to pay people with untaxable money in the form of insurance, so it is not a real insurance market.

Calling it insurance rather than a payment plan or something.

Further it’s got some serious conflict of interest going on with how the benefits are structured. So a plan may cover 1 300$ par of glasses, but not 2 pairs of 150$ glasses specifically to minimize the risk of a race to the bottom etc.

Because you end up paying around 50 times as much as what the glasses actually cost.

But because of how they do it they hide that. $40/month for 2 years = $960 "for insurance" which gives you the right to buy glasses worth around $20 or so.

All the number are inflated leaving people with the impression that glasses cost $400 - they don't.

So now we are talking about profit margins being bad?

We have the internet now, with plenty of other vendors willing to sell eyeglass frames and lenses for cheaper.

Profit margins that make a price more than double are pretty bad, yeah.

High profit margins are also bad when it's something people need.

The competition isn't working right, for a variety of reasons, and so the mere existence of competition does not make those problems disappear.

How is the competition not working right?

https://www.zennioptical.com/

Pretty sure you can go to most Walmarts and find much cheaper corrective eyewear than Luxxotica too.

https://www.walmart.com/browse/health-medicine/prescription-...

The average person doesn't consider them to be a viable option. Don't ask me why, but it's true. And them being considered a viable option is a prerequisite to competition working right.

The average person (at least in the US) does not consider the world’s largest retailer, with a well known reputation for being the cheapest, an option? I don’t buy that.

That WalMart link is to decorative glasses, not prescription glasses.

So here's the thing with WalMart and Luxottica - their insurance does not fully cover WalMart! They give you a significantly reduced amount with WalMart (or Costco), that's how you know it's fraudulent - they only want to cover their own stores, that's not a normal behavior for "insurance".

Perhaps these are better sources.

https://www.cleverdude.com/content/costco-optical-vs-walmart...

https://clark.com/health-health-care/costco-optical-eyeglass...