Do You Recommend Pet Insurance?

Even with greater average medical costs every year, only a handful of pet owners have pet insurance.

After two weeks in Michigan State University’s Veterinary Teaching Hospital, Katie, a 5-year-old Labrador retriever with a clotting disorder, was deemed healthy and was released.

Multiple blood transfusions, medications and critical care had brought her owners an $18,000 bill.

Fortunately, they were among the less than 1.5 percent of U.S. pet owners who subscribe to pet insurance. Because they had it, they were reimbursed more than $14,000.

With improved technology and extensive veterinary offerings, costly medical bills are fairly common—as is an owner’s inability to pay unexpected bills.

This can mean euthanasia for many animals, an increasingly unnecessary and passé practice. Frustration with pursuing Plan B treatment options or euthanizing an ill animal instead of treating it are leading more practitioners to promote health insurance for pets.

“With pet health insurance, there’s no need for economic euthanasias,” says Lloyd Meisels, DVM, of Coral Springs Animal Hospital in Coral Springs, Fla. “None of the insurance companies cover pre-existing conditions, but many of the companies now offer 80-90 percent payment with a client co-pay, which significantly eases the blow.”

After spending more than 80 hours researching pet health insurance options, David H. Wright, DVM, of Collierville Pet Hospital, in Collierville, Tenn., chose one company for the practice’s nine doctors and 55 staffers to promote.

“Nothing is sadder than seeing a client who can’t afford to pay for a pet’s treatment,” Dr. Wright says. “I feel that as veterinarians we owe it to our patients to investigate this, then educate clients about health insurance options. About six months ago I had more questions than answers about what insurance offered, so I took time to research companies that offered good customer service, value to clients and would be beneficial to the profession. I found one that I felt worked best for us.”

According to the American Pet Products Association’s 2009-10 National Pet Owners Survey, 62 percent of U.S. households own a pet, which equates to 71.4 million homes. The survey indicated that $12.79 billion is spent annually on veterinary care alone. So why don’t more owners opt for this risk management technique?

The average plan for an animal under age 6 costs $30 to $40 a month for dogs and about 25 percent less for cats. This isn’t a huge expense for a dedicated pet owner, but many owners are unaware of the existence of pet health insurance, while others haven’t taken the time to investigate the options.

Insurance providers largely rely on the veterinary-client relationship to sell policies, but many U.S. veterinarians have responded with an unyielding “no,” though insurance companies say more veterinarians are getting on board.

“Vets don’t want to be salespeople,” Dr. Meisels says. “The biggest deterrent for veterinarians is the fear that they will lose control over patient care, decision-making and fees. Pet insurance going the route of human medicine would be a disaster.

“Veterinarians don’t have the time, money or staffing to dedicate to coding and paperwork. However, this isn’t the case with pet insurance–it’s not designed the same way as human medical insurance.”

Veterinarians who have experience with pet insurance say the coverage is more closely related to car insurance than the human health insurance model. It is a fee-for-service indemnity insurance, offering compensation for unexpected health bills, not maintenance costs like vaccines and check-ups, though some companies offer preventive care add-on policies for an additional $15 to $20 a month.

All plans require a deductible, pay a portion of the total bill and have an annual reimbursement cap.

“The veterinarian doesn’t need to be the financier with insurance,” Meisels says. “I went with a company that has approval from the American Animal Hospital Association (AAHA). That, coupled with my research, made me more comfortable recommending it to clients.”

With an increasing number of companies and policies to choose from, AAHA initiated the Seal of Acceptance program in March 2008 to help pet owners decide on pet insurance policies that meet specific AAHA standards.

“ helps explain some points to look for when selecting an insurance company,” says Link V. Welborn, DVM, Dipl. ABVP, CCRT, of Tampa Bay Veterinary Medical Group in Tampa, Fla. “AAHA offers its seal of acceptance to any pet insurance company that offers a high-deductible policy that meets the program’s criteria.”

Veterinarians and clients also can visit to get a basic understanding of pet insurance. The site was designed to assist pet owners shopping for insurance, but it includes customer reviews and basic outlines of plans.

Jed Rogers, DVM, chief medical officer with Firehouse Animal Health Centers in Denver, says an unhappy client may take out insurance frustrations on the veterinarian or staff.

“We had some bad experiences with some of the initial insurance plans,” Dr. Rogers says. “It only takes one client unhappy with their insurance to make vets give up on promoting coverage.

“Sometimes plans aren’t easy to understand and veterinarians are expected to explain, but that’s why vets should choose just one company, understand how it works and educate staff about the insurance. Then it won’t be a stress”

He says the Firehouse group launched its pet insurance promotion effort last fall, educating all clients about the single pet insurance plan it chose to recommend. Firehouse focuses on owners of puppies and kittens, considering that the coverage would be least expensive with a young animal and probably be locked in before a diagnosis that would limit coverage on a pre-existing condition.

“When people are paying their bill is when it usually occurs to them that insurance would be a good thing to have,” Rogers says.

Veterinarians say clients’ insurance concerns include the annual cap, the monthly premium rate and the reimbursement turn-around time.

“If clients can be reimbursed by the insurance company before they’re billed by their credit card company, they’re happy,” says Rex Riggs, DVM, of Best Friends Veterinary Hospital in Powell, Ohio. “As pets age, the client may become concerned with being dropped because their pet has an increased number of medical claims, but that doesn’t happen with the better companies.”

Veterinarians say some companies can be deceptive, refusing to cover certain breeds, having specific definitions for what they consider a genetic disease, or reimbursing an owner based on the way a veterinary office writes a claim instead of by the cost. Rogers says a client with one particular company would have received three times the reimbursement if his office had written “laceration” on four lines of the insurance form—once for each laceration on the animal—instead of writing “laceration repairs” on a single line along with the fee.

“I like the strict 80/20 payment policies,” Collierville Pet Hospital’s Wright says. “That means there’s no need to check the specific procedure to analyze what percent the insurance will cover.”

Veterinarians say many companies will insure any pet regardless of age, but restrictions will apply.

“I haven’t heard of the company we deal with completely denying an applicant,” Meisels says. “In the past, some companies would deny claims after accepting an applicant, and we’d have to write letters to the insurer, which would eventually approve the claim. But that isn’t typical of a company following current standards.”

Some veterinarians say they would like to see insurance companies’ forms synch with veterinary computer software so clients don’t have to pay the entire cost up front and acceptance is automatic.

But others fear this would put them in the undesirable position of waiting for payment.

“I don’t want to handle accounts receivable, but it would be nice to have an estimator tool so the client can know more precisely how much he or she will pay for a procedure after insurance,” Rogers says.

Pet Insurance Can Be Low-Cost Employee Benefit

Family Veterinary Hospital of Stone Ridge in Chantilly, Va., provides pet health insurance to its employees “because we truly believe in it,” says Hanh Chau, DVM, CVA, CCRT.

“I can’t emphasize enough that everyone wins with good pet insurance plans,” Dr. Chau says. “There aren’t too many things that benefit everyone, but this is one. Insurance is good for the patient, client and the profession.”

When a practice owner decides to provide pet health insurance as a benefit, a fairness policy is necessary, considering that one staff member could own a single pet while another owns seven. One option is to insure one pet per year of employment up to three years.

“Our staff members can go to any emergency facility or specialty practice and use the insurance,” says David H. Wright, DVM, of Collierville Pet Hospital in Collierville, Tenn. “Our initial figures show that we could pay our staff members’ premiums and offer them better care without increasing our expenses.

“Insurance isn’t something veterinarians should fear,” Dr. Wright says.

Pet Insurers

Hartville Group Inc.(Hartville Pet Insurance, ASPCA Pet Health Insurance and Petshealth Care Plan brands) Canton, Ohio

Embrace Pet Insurance
Mayfield, Ohio

Pet First Healthcare
Jeffersonville, Ind.

Petplan USA

Seattle, Wash.

Veterinary Pet Insurance (VPI)
Brea, Calif.

Pet Partners Inc. (AKC)
Raleigh, N.C.

Pets Best Insurance
Boise, Idaho

24PetWatch Insurance
Buffalo, N.Y.

This article first appeared in the June 2010 issue of Veterinary Practice News. Click here to become a subscriber.

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