INSURING THE HEALTH
OF YOUR PET

by Susan Thorpe-Vargas Ph.D., John Cargill MA, MBA, MS

Can you afford the treatment that could save your pet's life? Pet health insurance options offer owners peace of mind about this dilemma.

"Put him down, Doc. I just can't afford to pay your bill" Requests such as this reveal many veterinarians' clients are unable to afford the cost of prescribed veterinary treatments, and they are forced into putting their dogs down Of course, there are times when euthanasia is appropriate, hut what about the times when it is not-those times when the treatment for correctable conditions is beyond the owner's financial reach?

To put the costs of veterinary care in perspective, consider that the level of training veterinarians receive and the costs of supplies and equipment are similar to those in the human medical community, yet veterinary care almost always costs a fraction of what the same procedures would cost on humans in a medical setting. Nonetheless, veterinary care can be extraordinarily expensive.

After researching and writing the article on pet loss (September 1997 issue), we realized that for those persons who might be devastated by the loss of a pet or an assistance dog (for sight-, bearing-, or mobility-impaired persons), some form of insurance or buying service for financial relief may be a necessity Often there is great intrinsic value derived from extended training and depth of human/animal bonding. The disruption that would occur from premature or unplanned loss of the animal may necessitate providing veterinary care.

If one is not independently affluent, there is but one solution to the risk of a potential health crisis for your dogs That solution is the very same one for people-health insurance or HMO like programs. We have come to think of health insurance in our own lives as costly hut necessary. Should it not be the same for our dogs? In our own lives, we make the decision to self-insure, go with an employer's health plan or privately purchase some form of health insurance ourselves. As veterinary technology advances and costs rise, more people are choosing to insure their pets' health, too. One insurance company has written more than 750,000 policies since 1982 with a claimed 82 percent renewal rate.

PITFALLS AND FINE-PRINT HAZARDS OF INSURANCE

Not all insurance plans are the same, nor should they be. There are many, and oftentimes confusing, options, provisions and exclusions, You must take your time when investigating these if you are to make an informed decision about which plan and specific features are right for your pet. If a health problem occurs during a period of coverage, the rules for what is covered or excluded from coverage, what caps or limits to payments, deductions, etc., are those in your policy binder and none other. There can be no "I thought I had coverage for that" or "I really wanted the extended plan" or "I thought it paid more for that kind of surgery" What you have is no more and no less than what is stated in the policy. The many options and types of coverage are the result of customers demanding very specific coverage. If the insurance carriers think they can safely underwrite a policy with requested features, and enough people ask for it, it is likely such a policy exists. It is likely there will be a combination of features at prices you find acceptable in some policy on the market, but you may have to spend some time researching what is available. If the coverage that interests you deals with congenital or hereditary conditions excluded from coverage by an insurance policy, you may find a buying service" is better for your situation. With that said, the greatest protection you can get against the risk of pet illness is insurance.

TO INSURE OR NOT TO INSURE, THAT IS THE QUESTION

When beginning an insurance analysis, you must determine what you wish to insure against-that is, what you cannot reasonably afford to have go wrong. For example, it would make little sense to insure against hot spots that can be treated simply and cheaply, but it might make great sense to insure against gastric torsion or bloat. Again, this is a matter of tremendous individual difference. For some owners, the peace of mind that comes with coverage for regular or semi-routine office visits more than outweighs the cost of insurance premiums. In determining what you wish to insure against, you first must determine what course of action you would take in certain events, such as finding out your old bitch had ovarian cancer. Some of us, on the basis of ethical treatment for animals, would elect to put the old girl down and not subject her to the unpleasantness of treatment in the face of a known fatal outcome. Others, again on the basis of ethical treatment for animals, would go to heroic extremes to preserve life. This is a very personal and intimate decision - it is your dog: you choose. We only ask that you have a well-thought-out basis for the choice you make. If you were to put the animal down, insuring against removing the ovaries and uterus and extended chemotherapy would be an unnecessary expense. It is precisely this option of putting an animal down that complicates insurance decisions for some as much as it simplifies it for others. As a corollary to this kind of thinking, do you wish the same insurance coverage for an old animal as for a young one or for a puppy? Owner attitudes run from "dogs are livestock" and thus disposable all the way to my dog is my child" and must be protected by all means. Some dog owners will discount the value of an older dog's life, believing it has had its turn at living and now faces an inevitable end and should do so without much fuss. Some fanciers believe a puppy has not yet earned its family membership, and a major illness will predispose it to a life of continuing health problems, thus it should be put down if a major health problem develops.

The questions underlying insurance choices tend to be ethical, philosophical, religious, financial and almost always emotional. You will find as you go through the insurance process that you are making decisions about life. There is hardly any facet of your life and belief system not touched by the decisions and choices you make concerning insuring your dog's health.

If you feel insurance is not for you because of cost, complexity and limitations, or it just does not (it your individual situation and animals, you may want to consider a buying service such as Pet Assure SM. Through its membership options, this service allows the purchase of veterinary services at a discount from specified providers under contract with the insurance provider. Such services are not regulated to the extent insurance companies are and generally have lower costs of membership than the insurance premiums characteristic of insurance companies. On the other hand, the price reductions generally are less than insurance coverage in the event of serious covered illness. However, these programs can provide greater benefits for the several thousand conditions often excluded from insurance coverage and even some of those covered but reduced by benefit schedules.

SPECIFIC CONSIDERATIONS

Once you've decided to insure your dog, your next step is choosing your plan's options. In order to make the best choices when customizing your insurance, you should be aware of these specific intricacies:

MULTIYEAR COVERAGE

Some carriers offer significant reductions in premiums for those willing to commit and pay up front for two years of coverage.

PREMIUMS

Some carriers will allow monthly, quarterly or biannual premiums.

PREMIUM PAYMENT

In this modern and electronic world, many carriers will allow automatic payment by credit card or checking account.

ELECTIVE PROCEDURES

There may be a statement that elective procedures are not covered. Be sure both you and the insurance company have a clear understanding of what is considered elective, or you may be in for a surprise. Most policies will not cover inoculations (rabies, parvo, etc.), worming,- teeth cleaning or nail trimming, and some will not cover spaying or neutering.

LIMITS

Read carefully the limits associated with the policy. It is common to have a per incident/per visit limit, annual limit and a lifetime limit. Policies vary widely. Generally the higher limits are associated with higher premiums or with benefit schedules or other allowances and restrictive conditions such as age and whether the condition was pre-existing or hereditary.

DEDUCTIBLES

Policies are available with or without deductibles.

PAYMENTS

It is common to insure only a portion of the cost, much as is done in human health insurance-Most policies will say something to the effect.' Your policy will pay 80 percent of the first $A and 100 percent in excess of $B of the benefit schedule per incident during each policy term after the deductible, with a maximum payment of $X per incident and $Y per term of coverage. Often a deductible will be added to the percentage co-payment.

BENEFIT SCHEDULE

Some policies pay up to a certain amount for a given health problem. Those with such restrictions will provide a benefit schedule, and payouts usually are a percentage of the benefit schedule allowance. A benefit schedule tends to make it possible for insurance companies and their underwriters to provide greater coverage for lower premiums because it eliminates the problem of veterinarians overcharging. Prices charged by veterinarians can vary as much for a given procedure as prices charged by medical doctors. Check with your veterinarian to see if the benefit schedule is acceptable. You may find it necessary to check with several veterinarians before you find one who will agree to the benefit schedule.

PRESCRIPTIONS

Since prescriptions for veterinary conditions can cost as much as prescriptions for human medical conditions, look carefully at whether prescriptions are covered and whether there is a deductible or co-payment.

MULTIPLE-ANIMAL COVERAGE DISCOUNTS

Some carriers will offer discounts if more than one animal is covered. Expect multiple-animal discounts in the range of 5 percent to 20 percent depending upon the provider.

WAITING PERIODS

Some providers, to avoid abuse of the system, require coverage be delayed for a month or more after acceptance of the application and premium.

PRE-EXISTING CONDITIONS

Some carriers will accept animals with pre existing conditions but usually on the basis Of their having been successfully treated for that condition and not having required further treatment for at least six months prior to the policy's effective date.

CONGENITAL AND HEREDITARY CONDITIONS

Do not expect your insurance to cover congenital problems unless they are reported to and accepted by the insurance company as a covered preexisting condition. Hereditary problems are in a gray area; cataracts, epilepsy, degenerative disc disease, hypothyroidism, diabetes and hip dysplasia may be covered by some policies. You would want to check this out very carefully. Note that many of the problems considered genetically transmitted by breeders are not considered "hereditary" for purposes of insurance. Veterinary Pet InsuranceTM generally goes by veterinary texts in determining whether a condition is hereditary.

AGE OF ANIMALS INSURED

Most insurance plans have both an upper and lower limit to the ages of the animals they will insure. Pet Plan will insure an animal for life as long as it is first insured by age 8. VPI insures by age group, much as is done in human health insurance. Pet Plan charges a premium surcharge of 25 percent for age 9 years and a 50 percent surcharge forage 11 years. Those -that cost the most in pay-outs are charged the higher premiums.

ROUTINE HEALTH CARE COVERAGE

Few insurance policies cover routine health care. However, Pet Plan does cover it and has adjusted its premiums accordingly under the belief that such "preventive" health care can prevent the occurrence of major problems down the line. The buying services generally cover routine health care. Review Table 2 (sorry, tables not available) for a comparison of features, costs and coverages of several health insurance and buying service products. It should become clear there is a product offering available to cover almost every situation, even old dogs and cancer. If you expect to be hospitalized, there even is an emergency caretaker/boarding fee plan to take care of your dog while you are in the hospital. We encourage you to visit various providers' World Wide Web sites as well See Table 1(sorry, tables not available). Insurance product offerings seldom are fixed for a long time, as rates, coverage and special features are adjusted to better reflect the demands of a fluid and fast paced marketplace. Insurance companies, in a very real attempt to remain competitive, offer many niche products, with premium discounts for age or breed.

THE FUTURE OF PET HEALTH INSURANCE

Pet health insurance is no different than other fields of insurance in that the product offerings are changing constantly to meet the demands of the marketplace. In all probability there is no one "perfect" plan. As demands of the marketplace change, so will the insurance and buying service products offered. For example, the authors have heard some criticism of VPI's genetic disease exclusionary policy, and this probably has driven potential customers to other insurance vendors and to the buying services- To better meet demand, VPI is test marketing additional premium "well care" and "hereditary" endorsements that would cover genetically transmitted disease and predispositions not yet manifested at the time of initial coverage. We hope the marketplace will recognize this great step forward and such endorsements will become standard options.

The future also may see providers offering both buying services and traditional insurance. Costs of being an interstate&licensed and -regulated insurer most likely will preclude many new insurance companies in the near4erm; however, the number of unregulated providers is likely to increase- While unregulated providers face lower costs and thus can offer equal coverage at lower rates, there is little protection for the consumer should a given provider go out of business. The marketplace will experience both good and bad unregulated providers and both good and bad regulated providers. As with auto, home and human health insurance, it will always be a case of "caveat emptor," or buyer beware. The contributions of the human/companion animal bond to employee productivity will be recognized further by employers, and more will offer pet health insurance or buying service memberships 'as employee benefits.

Pet health insurance is necessary for some pet owners but a waste of time and money for others. In any event, insurance is based on risk and provides some protection against untoward events. Insurance, as a means of reducing risk, can provide a tremendous sense of security, making other decisions in life easier. To this end we strongly urge you to consider the option of pet health insurance and determine if it makes sense for you and your dogs. Apparently, many people in the United States, Canada and Europe have come to the conclusion that pet health insurance and veterinary care buying services have come of age and can benefit them.

REFERENCES:

1. VPI brochure, Veterinary Pet Insurance, 4175 E. LaPalma Ave., Suite 100, Anaheim, Calf. 92807; (714) 996-2311 or (800) 872-7387; http://www.petinsurance.com, Email: usapets@primenet.com

2. H. David Haynes, Ross D. Clark (ed.) And Joan R. Stainer (ed. ), Medical and Genetic Aspects of Purebred Dogs, Veterinary Medicine Publishing Co., 1983.

3. John D. Bonagura (ed. ), Kirk's Current Veterinary Therapy XII: Small Animal practice, 12th ed., W.B. Saunders, New York, N.Y., 1995.

4. Telephone conversation with Dr. Jack Stephens, president, VPI, July 15, 1997.

5. Pet Assure already is available through some employee benefit plans.

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