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  • Dr. Bill Wagner

Pet Health Insurance: Not a Panacea, But a Step in the Right Direction

Providing modern healthcare is fundamentally expensive, whether to humans or animals. Our ability to prevent and treat diseases and extend duration and quality of life in our pets has increased astronomically over the last few decades, but those advances are not without cost. As the cost of care continues to climb, pet owners are often left struggling to figure out how to pay for medical care – especially large, unexpected medical bills related to illnesses and injuries. Pet insurance gives pet owners an opportunity to avoid being stuck unable to pay large, unexpected bills by adding a predictable expense. Pet insurance isn’t without downsides, however. In this week’s blog post we’ll be looking at the pros and cons of pet health insurance.


The Pros

1) Pet health insurance dramatically reduces the risk of pets being euthanized due to financial concerns. According to one study that looked at dogs presenting for gastric dilation volvulus, a life-threatening surgical emergency, uninsured dogs were 7.4 times more likely to be euthanized pre-operatively than insured dogs when controlling for other factors.

2) Reducing economic euthanasia is good for everyone. The biggest winners are clear: Pets and their owners. However, reduction in economic euthanasia is also good for veterinary healthcare workers. Euthanizing animals for potentially treatable reasons due to economic concerns is a cause of emotional hardship for people who have dedicated their careers to animal welfare. Days filled with difficult conversations around cost of care are also exhausting, emotionally draining, and time-consuming for veterinary healthcare workers who would rather be dedicating their time and energy towards providing care.

3) Not having to worry about cost means that healthcare conversations and decisions can stay focused on making the right choice for the patient. Most veterinarians will agree: Removing finances from the conversation of care makes it easier to recommend and provide the best options to clients.

4) Owners of insured pets pursue more care for their pets. A North American Pet Health Insurance Association (NAPHIA) report shows that pet owners spent 29 percent more per year on veterinary care when their dog was covered by insurance, and 81 percent more on insured cats. Overall, insured pets receive nearly three times the amount of veterinary care. More visits, more preventative and interventional care pursued, and less concern about cost all adds up to more opportunities for pets to receive care that will contribute to longer and healthier lives.

The Cons

1) The cost of pet health insurance is still out of reach for many pet owners. Pet health insurance removes much of the unpredictability of pet healthcare expenses but doesn’t eliminate the cost of care itself. Unfortunately, those who are most likely to be unable to afford pet health insurance are also those who are most likely to need to choose economic euthanasia if their pet suffers a major health crisis.

2) Pet health insurance doesn’t cover everything. Pet health insurance usually requires proof of health status before starting a policy and will exclude preexisting conditions. Importantly, most pet health insurance policies do not cover some or all the expense related to dentistry which is a common and significant veterinary health expense that most pets will incur during their lifetime. Bilateral issues may end up not getting covered on the contralateral side (i.e. insurance may consider an issue on one side of the body as a preexisting condition if the issue arises on the other side). Some insurance plans will also have a list of breed-specific coverage exemptions that prevent coverage of common conditions in certain breeds.

3) Not all insurance is the same and understanding what is and isn’t covered isn’t always easy. Premiums, deductibles, and types of included care all vary between plans so being “covered” doesn’t mean the same thing between different plans. When in doubt, your veterinarian can guide you through what things to look for in a pet health insurance plan based on your pet’s lifestyle and medical history.

4) Pet health insurance usually works as a reimbursement system. Payment being due at time of service is the standard for veterinary healthcare. However, pet health insurance usually doesn’t cover the up-front cost for care. Instead, they will typically reimburse pet owners later after fully reviewing the claim. This leaves pet owners on the hook for covering the immediate cost out of pocket and waiting to find out if their claim was accepted by insurance. This can be problematic for pet owners who don’t have access to sufficient credit or savings to cover the short-term cost of care while waiting for reimbursement.

Alternatives to pet health insurance

1) Self saving: Setting up an investment account for your pet that you consistently contribute to instead of paying for insurance and putting the money into lower-risk, liquid investments that you can turn into cash in a reasonable time frame (enough time to cover a large credit card bill) is an alternate option to pet health insurance. This has the advantage of turning budgeting for pet healthcare into a growing investment rather than a fixed expense. However, the downside is that if your pet runs into a major healthcare crisis that exceeds the money you’ve set aside then you’re back to the original scenario of covering unexpected costs entirely out of pocket. This is a good option for those who have financial reserves that they can tap into if costs exceed the amount set aside for their pet but carries much more risk than having insurance since there’s still the possibility of a very large health crisis exceeding your savings.

2) Healthcare credit cards: There are credit cards specifically designed for healthcare expenses that have low or no interest rates for a set period, but then convert to high interest rates after that time is over and often leave you on the hook for accrued interest during that initial period if not paid down in time. This can be a good substitute for health insurance for mid-sized unexpected expenses that you can afford to pay off within a reasonable timeframe but can become extremely expensive if you run up a larger bill than you can reasonably afford to pay down. These options also require credit approval, which isn’t an option for everyone.

The Takeaway

It is this author’s opinion that the benefits of pet health insurance significantly outweigh the downsides. It isn’t a panacea for the significant cost of veterinary healthcare, but it does smooth out the large, unexpected healthcare expenses for pets in most situations and those types of expenses are the ones most likely to result in economic euthanasia. Veterinarians and pet owners alike stand to benefit from the better healthcare that the average insured pet receives compared to uninsured ones, so it behooves veterinarians to start the conversation with pet owners about health insurance as an option as early as possible while pets are young and healthy and before preexisting conditions arise so that they can get the maximum benefit of insurance.

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