There's a lot of information out there about pet insurance, but there's a lot of misinformation, too.
Pet health insurance is on the rise, growing tenfold over the last 10 years, according to the Better Business Bureau, from one pet insurance company in 1997 to 12 companies in the United States today. And with roughly 1 percent of U.S. dogs and cats insured, compared with one-fifth of pets in the United Kingdom, the industry can expect that growth to continue, according to BBB.
Despite the optimistic outlook, one of the most common myths that plagues the pet insurance industry is that it will turn pet care into HMO-type healthcare to which humans are subject.
Kerri Marshall, DVM, chief veterinary officer for Trupanion in Seattle, Wash., said she doubts the changing world of pet insurance will leave pet owners navigating HMO-like mazes and rules.
“Understandably, veterinarians don't want to see pet insurance providers controlling the way they price,” Dr. Marshall said. “This concern comes from these veterinarians' interactions with pet insurance providers who reimburse based on benefit schedules. They see that these providers are reimbursing only a portion of the price they charge, saying that the low reimbursement is the ‘usual and customary' charge for that medical treatment.”
Marshall said that not only leads to decreasing compensation for veterinarians, but it also creates a divide between the veterinarian and client who may feel she is being overcharged by the veterinarian.
“Some of the newer pet insurance providers today do not reimburse based on a benefit schedule, but instead pay a percentage of what the veterinarian charges,” she said. “So veterinarians have the option of recommending those providers they feel best meets their needs.”
Jack Stephens, DVM, founder and president of Boise, Idaho-based Pets Best, who presented the first pet insurance policy to television's Lassie, doesn't see the human managed care's pricing controls, restricted doctor selection and limited treatment protocol entering into pet health.
“There are a host of reasons pet insurance will remain free of those negative aspects, such as rapid and direct claims payments to clients,” Dr. Stephens said.
“Very important is for veterinarians to not join networks or offer discounts based on the buying power of groups. Veterinarians should always be able to charge for services performed at the price they determine based on the level and cost to deliver their quality of care. The current delivery of pet insurance, without human managed care principles, will deliver the best medicine at the best price to pet owners.”
Mary Beth Leininger, DVM, vice president of veterinary relations with ASPCA Pet Health Insurance provided by the Hartville Group, said worries about HMO-type coverage that will dictate treatments are misplaced.
“Pet insurance is not like human health insurance,” Dr. Leininger noted.
“It's property and casualty insurance, where clients pay up front for veterinary care, then file a claim to be reimbursed. We will never interfere in treatment recommendations or your client relationships. In fact, pet insurance is beneficial in this regard because it helps more clients follow your recommendations.”
Carol McConnell, DVM, vice president of underwriting and chief veterinary medical officer for VPI Pet Insurance, also hears concerns that insurance companies do everything they can to not pay a claim.
“Quite the opposite,” Dr. McConnell said. “Pet insurance companies are highly regulated and subject to spontaneous audits by the department of insurance. As such, they have to follow very specific, well defined rules about claims reimbursements, and those rules have to be uniformly applied, so each policyholder is treated fairly and equally.”
A myth Trupanion's Marshall hears often is that pet insurance is going to add an administrative burden to the practice.
But she notes that the veterinarian is asked to do two things when helping a client submit a claim: fax or email the pet's records to the insurance provider so the claim can be evaluated, and fill out a small section of the claim form with the official diagnosis.
“The time this takes is much less than the time it takes to discuss several different options in care when a pet owner doesn't have the financial means to pay for the best treatment option,” Marshall said.
Stephens said paper work for claims is usually only requested when there is a claim close to the policy effective date, and medical records are a way to determine if a condition was present before a policy effective date and therefore ineligible for coverage.
“Pets Best requests medical records with less than 10 percent of our first-time claims,” Stephens said.
With so many pet insurance providers today, some may believe it's not a veterinarian's responsibility to help clients choose their pet insurance provider. But the reality is that many clients will be faced with conditions in their pets that will require expensive treatment that they won't be able to pay for out of pocket, Marshall said.
“If veterinarians don't take the responsibility of helping clients choose a financial plan that makes sense for them, it will be the veterinarian who will be performing the economic euthanasia or providing Plan B treatment instead of Plan A, which is never the best answer,” she said.
And because pet insurance companies offer policies that reimburse a percentage of the actual invoice for sick or injured pets, the behavior of the pet owner changes materially.
“The clients on average spend two times more and come in twice as often,” Marshall said. “This solves two major problems facing the profession in mature practices: flat to no revenue expansion in the last five years and a decrease in veterinary visits over the last decade.”
Confusion over pet insurance is an opportunity for veterinarians and their staffs to offer their clients yet another service, Stephens said. Pet insurance increases clients' buying power, so vet staffs should invest the time to have a basic knowledge of which companies are providing the best value and services, and what coverage they offer, he said.
“Clients look to their veterinarian for the best advice for their pets and pet insurance is no different,” he said. “Veterinarians would not give a client a choice of six antibiotics for her pet. They would tell her which antibiotic they recommend. Pet insurance is no different. Recommend one as being reliable, taking the confusion out of the decision.”
Leininger, with ASPCA Pet Health, said it's easy to teach staff to talk to clients about pet insurance.
“There are differences among pet insurance providers, but it's easy to learn about the plans and suggest two or three providers to your clients so they can then find the plan that's right for them,” she said.
“For example, we offer lunch-and-learns for clinic staff to walk everyone through how ASPCA Pet Health Insurance works. It's not difficult or time consuming to help your clients get started as they shop for pet insurance.”
Lisa Hockensmith, communications manager with the Hartville Group Inc., said a false belief she's heard is that a veterinarian has to accept pet insurance in order for treatments to be covered.
“Pet insurance plans in the U.S. don't have networks of veterinarians who have to accept the insurance in some way,” Hockensmith said. “There are some discount or wellness programs available that operate this way, but it's not the case with pet insurance.”
Hockensmith noted that not all pet insurance plans are the same.
Some plans have lower age limits for illness coverage or they don't cover pets over a certain age, whereas others have higher age limits for initial enrollment in illness plans.
“Pet insurance plans are not quite like car insurance, where the coverage is basically the same among most providers,” she said. “It's worth learning about the options so clients can find the right coverage for their needs that's also affordable for the long term.”
Costs also vary, but Pets Best's Stephens says it is affordable.
Pet insurance premiums average roughly $30 per month, with coverage options for less, if people choose higher deductible and co-payment options, while feline and accident-only plans can be as little as $5 to $10 per month, he noted.
One myth that VPI's McConnell likes to dispel is that pet health insurance only works if you are unlucky.
“Insurance exists to protect those who have unexpected events that could cause financial hardship,” she said. “Yes, it works when you're unlucky. That's the point.”
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