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Association Surveys Customers

The North American Pet Health Insurance Assn. was formed last fall, and to date its membership includes four pet insurance companies representing six plans, says founding member Jack Stephens, DVM, of Pets Best in Boise, Idaho.

Since its launch last September, the association has established a website and recently hired a management company to oversee its day-to-day operations.

Dr. Stephens says the association has also engaged an independent survey firm that will poll customers of member companies after a claim is made. The surveys will allow customers to rate their insurance companies’ performance and service. Results will be posted on the NAPHIA website.

“This is a bold and strong move to provide transparency and improve the image of pet health insurance, which we feel has been damaged in the past few years,” Stephens says. “We know we have to greatly increase awareness and build back trust in pet insurance, and the founding members are dedicated to this endeavor.”  

Stephens says the association will open membership to all companies that meet its standards. Criteria include prohibiting companies that dictate veterinary fees and requiring companies to allow clients to use any veterinarian they choose.

Standards also require that regular claims be processed within 10 business days and that the companies invite all clients to participate in the new public satisfaction survey.

At the moment, NAPHIA’s membership base represents only a small proportion of the North American pet insurance market. Stephens hopes that will change. 

Alex Krooglik, co-founder of Embrace Pet Insurance in Mayfield Village, Ohio, says his company is considering joining the association.

“NAPHIA will encourage pet insurers to be open and upfront about what their policies do and do not cover, something we have always believed is a necessary condition to re-build the eroded trust in pet insurance,” he says. 

Chris Ashton, owner of Petplan USA in Philadelphia, says his company might consider joining the organization at a future date. But he also notes that until the organization’s membership includes the leading pet insurance providers—namely VPI and Hartville— its impact will be limited.

Ashton says there are ways in which the organization could be more useful to its member companies.

“Right now, it’s a few relatively small companies looking to benefit from sharing knowledge,” he says. “Benefits of such an organization could potentially include the establishment of a central fraud database, but as far as I know, that’s not something the association is considering right now.”

Linda Bell, chief marketing officer of PetPartners Inc., exclusive provider for the American Kennel Club Pet Healthcare Plan and the Cat Fanciers’ Association Pet Healthcare Plan, says many veterinarians are concerned about the effects on their business methods if insurance providers move to managed care.

“We think it is important to build support for our products with veterinarians as well as pet owners,” she says. “Therefore, we have no intention of introducing any kind of managed- care products.”

Consumer Considerations
Mark Warren, president and chief executive officer of Pethealth Inc., believes it will be consumers—not veterinarians—who ultimately determine how the pet insurance industry develops in the U.S.
 


To date, preferred provider organization-style programs have not become widespread. But Pethealth has run a small network-based pilot program in Texas for the past year.


“Supply does not lead demand,” Warren says. “It’s not that the pet insurance industry will automatically migrate to a managed-care model. But consumers might decide that’s what they want. And if they want a PPO, someone will have to provide that for them.”

To date, preferred provider organization-style programs have not become widespread. But Pethealth has run a small network-based pilot program in Texas for the past year. It is offered through a partnership between USA Managed Care Organization—doing business as USA Pet Health Network, a veterinary health network based in Austin, Texas—and Pethealth.

Overall, the program represents a small portion of Pethealth’s business, Warren says. At press time, the USA Pet Health Network website listed 18 participating Texas veterinarians.

Warren says the company has no plans to take the test program national, just in selected states.

Defending Value
Krooglik, of Embrace Pet Insurance, says many veterinarians are also concerned with the unpredictability in pet insurance claims—not knowing up front whether claims will be paid or how much will be paid.

He says his company is tackling the issue by focusing on the pre-purchase experience and by giving pet owners tools to do their own research.

“By boosting pet parents’ understanding of pet insurance up front, subsequent problems can be greatly reduced,” he says.

Recent articles in the consumer press have questioned the value of pet insurance.

In April, a Washingtonpost.com article cited several sources, including an editor at Consumer Reports, who recommended that consumers consider alternative means of managing their pets’ health costs, such as setting up pet-emergency funds and depositing to them regularly, as one would pay insurance premiums.

Stephens says such value concerns need to be addressed.
 

Pet Insurance Companies

One of the key goals of the North American Pet Health Insurance Assn.—an industry association formed last year by a handful of pet insurers, Pets Best included—is to enhance public perception regarding the value of pet health insurance.

To date, veterinary associations have not taken firm stances on pet insurance.

For example, the American Animal Hospital Assn., in its “Statement on Meeting the Cost of Pet Care,” recommends that pet-owning families assess their individual financial situation when considering their abilities to meet unexpected veterinary expenses.

“For some families, these expenses may be met through existing savings,” the statement reads. “Others may be able to use credit card reserves or medical payment cards. Some families should consider budgeting for these expenses, and still others may want to consider protecting themselves through pet health insurance policies.”

In March, however, AAHA launched a “seal of acceptance” program that encourages pet insurance providers to offer high-deductible policies ($500 to $1,000). The association emphasized the need for pet owners to have coverage for catastrophic expenses. Higher deductibles, the association contends, would reduce premiums and make insurance a more viable option for many budgets.

Some veterinarians are likely to continue to have reservations about the concept of pet insurance, says Chris Ashton, owner of Petplan USA in Philadelphia.

“But pet insurance isn’t going away,” he says. “So we encourage veterinarians to partner with the industry so that together we can ultimately ensure that veterinarians are able to offer the highest quality of care possible.”

“For some families, these expenses may be met through existing savings,” the statement reads. “Others may be able to use credit card reserves or medical payment cards. Some families should consider budgeting for these expenses, and still others may want to consider protecting themselves through pet health insurance policies.”

In March, however, AAHA launched a “seal of acceptance” program that encourages pet insurance providers to offer high-deductible policies ($500 to $1,000). The association emphasized the need for pet owners to have coverage for catastrophic expenses. Higher deductibles, the association contends, would reduce premiums and make insurance a more viable option for many budgets. <HOME>

 

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