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The Wall Street Journal

March 13, 2008

Is Pet Health Insurance Worth the Price?

Suzanne Barlyn

Pet insurance was one expense we thought we could do without -- despite 14 years of cohabiting with furry critters. But we nearly kicked ourselves for not buying a policy sooner when one dog faced possible orthopedic surgery that would set us back $2,500.

We test four pet insurance services and compare the results. Animal lovers have good reason for concern about their veterinary bills. Americans spent $10.1 billion in veterinary care last year, up 40% from $7.2 billion in 2002, according to the American Pet Products Manufacturers Association (APPMA), a Greenwich, Conn.-based trade organization. The increase "is a reflection of more services now being available to pet owners and more people being willing to take advantage of those services," says APPMA President Bob Vetere. Procedures such as hip replacement and cataract surgery for pets, for example, were practically unheard of a decade ago, he says.

Pet insurance, which covers veterinary care, may help offset the expenses -- and its popularity is on the rise. There are currently two million pet-insurance subscribers in the U.S. -- about 3% of pet owners -- but APPMA expects that figure to rise to between 5% and 7% of pet owners by 2010.

To test whether pet insurance is worth the premiums, we insured four pets -- two cats and two dogs -- through four national pet insurance plans.

Buying pet insurance, we learned, is a crapshoot -- just like any other policy. The occasional benefits checks we received seemed to take the edge off veterinary expenses. But we soon realized that our premiums could ultimately cost more than veterinary care over our pets' lives. For example, one of our policies would cost about $4,200 over 10 years. Pre-existing conditions are generally excluded in policies. So insuring our pets in their infancy, before those ailments developed, could have helped offset bigger bills as our pets grew. We'd consider buying a policy for breeds prone to specific health problems -- such as pugs, who often suffer eye conditions.

Filing claims is similar to the paperwork for our human health insurance. All but one insurer, VPI Pet Insurance, required a vet's signature on our claim forms -- a hassle, we thought. But insurers say it's necessary for proper documentation of procedures and diagnoses. Our policies tended to have deductibles between $50 and $125 and covered 80% to 90% of the insurer's allowable fees for veterinary care.

Our experience with ASPCA Pet Health Insurance was marked by terrible sadness. We enrolled Kimba, a seemingly healthy, 15-year-old mixed-breed cat, under a plan that covered wellness visits plus the basic illness and hospitalization coverage offered through cheaper plans.

Our semiannual premium came to $191.40, plus a $10.50 issuance fee. But about a week after she was enrolled, she was in a veterinary emergency room, suffering respiratory distress. X-rays suggested cancer. Eight days later -- after repeated crises and hospital visits -- we stroked Kimba's struggling frame as the vet ended her suffering with lethal injections.

Three months later, we finally mustered the fortitude to print out forms from the insurer's Web site and mail in $3,056.50 in claims.

We were shocked to learn our claim was ineligible for reimbursement because Kimba's sickness manifested within a 30-day waiting period for illness coverage. The terms were laid out clearly in our policy, so we should have known. If we had not submitted any claims during the waiting period and had called to cancel our policy, we would have been entitled to a full refund of the $191.40 semiannual premium. The insurer is still reviewing our refund request.

Pablo, a 3-year-old pug, developed a skin condition and bladder stones two years earlier. We knew, from reading the VPI Pet Insurance Web site, that our policy wouldn't cover these pre-existing conditions. VPI requested Pablo's veterinary records and required an X-ray of Pablo's bladder -- even though his bladder condition wasn't covered. A VPI spokesman said the company required an X-ray because it wouldn't insure a pet with active bladder stones due to potential complications.

The company ultimately issued a policy for $31.25 per month, including wellness coverage. But we were still on the hook for Pablo's chronic skin condition -- which we stopped treating to reduce our expenses -- and $16 for each five-pound bag of prescription dog food for the bladder stones (special diets are generally excluded anyway). The reimbursement rate for a wellness visit was pretty low: We were billed $175 for the visit, which included vaccinations and a heartworm test, while the policy paid just $74.

We insured Oscar, a 3-year-old Persian cat, through the American Kennel Club Pet Healthcare Plan. Enrolling online was simple, and the insurer billed our $45 monthly premiums to our credit card.

Strangely, Oscar -- strictly an indoor cat -- suffered flea infestation twice during our test, and a flea allergy. He needed multiple remedies, including flea baths and antibiotics. Our vet bills totaled $453 for two separate visits. We resubmitted our claims after receiving a letter saying they were incomplete. (They weren't.) A few weeks later, we received three checks totaling $225.88, which reflected deductions for our $125 deductible and 20% co-pay.

Petshealth Care Plan partially reimbursed numerous claims for Pringle, a 2-year-old pug, which included expenses for an ear infection, neutering, a corneal ulcer, and a wellness visit. Our first treatment for his corneal ulcer cost $152, for which we received $106 in benefits. We consulted a veterinary ophthalmologist when the condition didn't improve, who stitched Pringle's inner eyelid closed so his cornea would heal. We filed an additional $375 in claims -- and received $263. His $75 routine dental cleaning wasn't covered, but the insurer picked up $140 of Pringle's $342 neutering bill (we later learned that Hartville Group, a Canton, Ohio-based pet health insurer, administered both the Petshealth Care Plan and ASPCA policy).

MSN Money Central

June 12, 2008

Should you buy pet insurance?

With vet bills soaring and fancy new treatments available, it's an option more owners are considering. Plus, 8 ways to cut the cost of keeping a healthy pet.

By Liz Pulliam Weston

A few years ago, pet insurance would have ranked right up there with life insurance for children and dread-disease coverage on my list of policies you don't need.

Now I'm not so sure.

I still believe most people are better off forgoing pet insurance and instead putting the money they would have spent on premiums into a savings account. Pet coverage can cost $2,000 to $6,000 over the life of an average pet, and the chances are slim you'll ever need to shell out that much for treatment.

But if you're the type of person who would do anything to save your pet, including spend thousands of dollars on medical care, pet insurance might be a preferable alternative to going into debt.

New treatments and monstrous bills

What's changed in recent years is the state of veterinary science, as well as the economics of running a veterinary practice. Vets today can offer treatments that were unheard of just a few years ago -- and at prices that could make you howl. Consider:

Treatments once reserved for humans, from radiation therapy to kidney transplants, are now available for pets. That means once-fatal conditions are now treatable at costs ranging from $1,000 to more than $5,000.

Vets have access to increasingly sophisticated and costly diagnostic tools, such as MRIs. Such screenings not only boost the cost of exams but often detect problems that once would have gone unnoticed and untreated.

These expensive tools and procedures have helped create health care inflation in the pet doctor world.

Americans are expected to spend nearly $11 billion on veterinary care in 2008, according to the American Pet Product Manufacturers Association. That would be an 8.5% increase from 2007.

But pet owners with insurance are still in the minority. Less than 3% of the nation's estimated 71 million pet owners have policies, although that number has grown from less than 1% in 1995.

Insurers have teamed with the American Kennel Club and Petco Animal Supplies to offer the insurance, and more than 1,600 companies -- including Office Depot and Google -- provide the coverage as an optional employee benefit.

Deductibles, exclusions and surcharges

The oldest pet insurer, Veterinary Pet Insurance, has seen its revenue climb at a 26.8% annual rate since 1998. The company, which has about 71% of the U.S. pet insurance market, had gross sales of $149 million in 2007.

Pet insurance is far from a cure-all, though:

The policies typically have deductibles, co-pays and caps that limit how much will be paid out annually.

Pre-existing problems and hereditary conditions, such as hip dysplasia in retrievers and German shepherds, are normally excluded, although one insurer, Embrace Pet Insurance, covers hereditary and chronic conditions.

The older your animal, the more you'll have to shell out in premiums. Some insurers don't cover pets older than 9; others levy stiff surcharges.

Veterinary Pet Insurance, for example, offers two levels of coverage:

Item Standard Plan Superior Plan

Per-incident deductible

$50

$50

Co-pay

10%

10%

Cap per accident or illness*

$2,500

$4,500

Annual cap

$9,000

$14,000

Kitten premium**

$113

$193

Mature dog premium***

$268

$471

Adult cat premium****

$94

$164

Adult dog premium*****

$134

$239

* The Standard Plan pays up to $780 for removing a foreign object from an animal's intestines; the Superior Plan pays up to $1,363.
**Annual premium for a domestic shorthair less than a year old in Los Angeles.
***Annual premium for an 8-year-old Labrador retriever in Los Angeles.
****Annual premium for a 3-year-old cat in Seattle.
*****Annual premium for a 3-year-old mixed-breed in Seattle.

 

Going the distance for Fluffy

Because insurance is best used as protection against catastrophic expenses -- not those you could easily pay out of pocket -- the question becomes: How deep in the hole would you go for your pet? And then could you afford to pay those costs yourself?

Most common surgically removed items

1. Socks

2. Underwear

3. Panty hose

4. Rocks

5. Balls

6. Chew toys

7. Corn cobs

8. Bones

9. Hair ties/ribbons

10. Sticks
Source: Veterinary Pet Insurance

Pet insurance is a nonstarter for many pet owners, simply because they take a pragmatic approach to their animals. If the cost of treatment got too high, they would choose to have the animal put to death.

But many who think they'd draw the line at a certain dollar amount find their convictions wavering when the time actually comes, said Veterinary Pet Insurance's chief executive, Dennis Drent. The kids are crying, the vet says a treatment would be successful, and some parents break down and spend the money.

"It can be a very emotional situation," Drent said.

If you don't have sufficient savings to cover the treatments, you might consider pet insurance. But do your homework before you buy:

Shop around. Policies and premiums can vary widely. Take note of not just the monthly or annual cost but the differences in deductibles, co-pays and caps, which may limit payouts by incident, annually or the animal's lifetime. Ask whether the insurer offers discounts for insuring multiple pets or whether your employer offers pet insurance as a voluntary benefit. The companies to check include PetCare Pet Insurance, 1-866-275-7387; Petshealth Care Plan, 1-800-807-6724; Veterinary Pet Insurance, 1-888-899-4874; Embrace Pet Insurance, 1-800-511-9172; and Petplan Insurance (Canadian), 1-800-268-1169.

Check with your state. Like human health insurers, pet insurers should be registered with your state regulators.

Scrutinize policies and understand their exclusions. The conditions most likely to afflict your pet are often the ones most likely to be excluded from a policy.

Beef up your savings. A Consumer Reports analysis found that pet owners with insurance may actually spend more over time on their animals than those without.

Whether you opt for pet insurance or not, you can help control how much your animal costs you. Here are some other ways you can trim vet bills:

Use low-cost clinics for shots. Your vet may host one or two such clinics each year, or you can call your local Humane Society chapter, animal control department or veterinary hospital for leads.

Get second opinions. You'll have time, with most conditions, to consult another vet before committing to expensive treatments or drugs. You also can consult The Merck Veterinary Manual online for a rundown on your pet's condition and recommended treatments.

Ask for samples. Your vet may have free starter packets of many popular medications. It doesn't hurt to ask.

Shop around for meds. You can call around to other vets, check out pet catalogs or search the Internet. DiscountPetMedicines.com has links to sites that offer lower-priced medications.

Don't cheap out on pet food. An investment in better-quality food can pay off in fewer health problems, particularly with cats, which can be more susceptible to urinary tract infections if fed inexpensive cat food. Check with your vet.

Keep their weight down. Just as with people, obesity in animals can trigger health problems.

Keep your pet indoors or on a leash. Free-running animals have more accidents, contract more illnesses and take a bigger toll on the environment than pets that are kept under control. (In other words, Fluffy will live a longer, healthier life indoors, and the songbirds of the neighborhood will thank you.)

Research before you buy. Next time you're in the market for a pet, remember that dogs tend to wind up in the vet's office twice as often as cats, making a feline the better choice for someone on a budget. Also, research the hereditary and chronic problems of each dog and cat breed you're considering, so you can have some idea of the potential vet expenses you might face.

East Valley Tribune

July 16, 2008

What's a pet worth? Trip to vet gets costly

Mandy Zajac

Here we go again.

For the second time in 12 months, my husband, Matt, and I are waiting anxiously in a pet emergency room, our 90-pound golden retriever panting heavily on the floor between us. Stoli, 7, is not feeling well. After more than two hours and $200 in our veterinarian's office, we've been referred to a state-of-the-art hospital where, we've been told, an internist and cardiologist should be able to tell us why our dog's heart is ricocheting along at 300 beats per minute.

Is pet insurance a good idea for you?

Stoli, a golden retriever belonging to Mandy and Matt Zajac, is seen here during a visit to VCA Animal Referral and Emergency Center of Arizona. JULIO JIMENEZ, TRIBUNE

Knowing Stoli will soon be connected to an IV and monitored overnight by a doctor who looks like he could command a highly decorated military regiment gives us comfort, but we know all too well: This kind of care is going to cost us.

A year ago, Stoli had a near-death bout with GDV, a freak condition in which her stomach filled with air, twisted several times on itself, choked off healthy tissue and siphoned circulation to vital organs. It was the kind of surgery that was presented to us like this: "If Stoli does not go into surgery right now, she will die. If she does go into surgery, she might die anyway. What do you want to do?" With moments to decide, we couldn't let her go. She wasn't old and sick; 12 hours prior she'd given a 140-pound Great Dane a run for his money in a friendly battle over a squeak toy.

So tonight feels depressingly familiar. Before we even know what's wrong with Stoli, we're on the hook for almost $2,000.

Spending this money isn't an easy choice, and it might be a stupid one. We've got bills, a busted old car that's forever in the shop, a budget we really must to stick to. But we're fortunate: We have no children, and we're still of the opinion that Stoli adds more to our life than new hiking shoes, regular haircuts or name-brand anything. So far, we're willing to sacrifice to keep her healthy. As crazy as it sounds for a dog to have a cardiologist, we're grateful this doctor and his Space Age-looking machines exist.

But we're starting to think pet insurance might have been a good idea. If we'd taken out a policy on her at age 2, we would have paid about $2,000 in monthly premiums by now. At least double that amount would likely have been paid out to us as reimbursements for her ER visits in the past year.

Of course, there would have been other costs: a deductible, 20 percent or so of the remaining costs beyond the deductible, and all of the routine vet care over the years. Paying for checkups, heartworm medicine, spay surgery - all of that is what we signed up for as pet owners, just like cleaning Stoli's ears and brushing her teeth every week. We wouldn't have gotten off cheaply.

But we're the kind of people who would rather plan to spend $34 every month than be walloped with a $3,000 bill when we're, oh, planning a wedding (like we were the last time) or house-hunting (like we are this time).

Everyone I've talked to, from the founder of Pet Insurance Review to veterinarians and representatives from pet insurance companies, says the same thing: Pet insurance is probably best for people who think of their pets as their children, people who would do anything to keep their pet alive.

We're not there yet. Stoli isn't our child, and there's a point at which keeping an animal alive can start to feel more like a Frankenstein experiment than the pet's best interest. But Stoli is - well, family. She has no less than seven nicknames and her own basket of "babies" given for birthdays, holidays and "just because." Puppy Fight Night (a half-hour play session) is a household tradition, and on rare occasions, she's allowed to sleep at the foot of the bed. For Matt, she's been the only constant through career changes, meeting and marrying a girl, and moving cross-country. The three of us are The Zajacs.

If Stoli is any indication of what our next dog will mean to us, we know we'll want to be able to say yes to the best care we can afford.