THE VALUE OF INSURANCE LIES IN HOW YOU MAKE MEDICAL DECISIONS
For his entire life, our pup Micky had medical insurance. After fifteen years of experience, we recommend it. So does our vet.
We first looked at pet insurance when Micky was a tiny puppy. Back then, Jane participated in an online forum of dog owners hosted by a pair of nationally known trainers, and the topic of pet insurance came up in discussion multiple times.
A question that new dog owners often asked was ‘Will I come out ahead if I get insurance — will it be cheaper than it would be if I paid the vet bills myself?’
Which kind of misses the point.
Health insurance for your pet can’t be evaluated on a balance sheet. In fact, if everyone who had pet insurance came out ahead financially, the insurance company probably wouldn’t last long.
No, the point in having pet insurance is so that you never have to make a treatment decision based on cost. You make it based on the best interests of your pet.
When Micky was young, he had some health issues — first, pancreatitis put him in the hospital overnight, then another, difficult-to-diagnose issue required an MRI and a trip to a specialist in Houston — so, in fact, we did come out ahead. What we spent in premiums during those years didn’t come close to the cost of our vet bills.
However, as Micky got older, he got healthier, while his premiums climbed because of his age. What we paid in premiums over the second half of his life definitely exceeded the costs of his medical care during those years.
But we never doubted the value of the insurance. It gave us peace of mind.
WHAT OUR VET SAYS
Preparing to write this article, I talked with Dr. Christopher Trust at Eagle Veterinary Hospital on McCullough in Olmos Park, where we had been taking Micky.
Dr. Christopher Trust at Eagle Veterinary Hospital.
Most companies, on their websites, will give you price quotes and simple explanations of how their coverage works. That’s probably fine for narrowing your choices, but once you’ve picked an insurer, get a copy of the legal policy document and read it. There may be some fine print that modifies the simplified pitch used for marketing.
Here are some of the things you should consider when reviewing pet insurance, both to compare policies from different companies and to decide what level of coverage makes the most sense for you.
Coverage and Exclusions: Review the coverage provided by each plan. Does it cover accidents, illnesses, hereditary conditions, and chronic diseases? Does it cover medications? Does it cover preventive care, vaccinations, and wellness checks? Be sure you understand what’s excluded from coverage — things like breed-specific genetic issues, for example.
Waiting periods and pre-existing conditions: When you start a new policy, there’s likely to be a waiting period before coverage kicks in — maybe something like a week for injuries and a month for illnesses. That’s closely connected to another restriction: insurers don’t cover pre-existing conditions. “If your puppy is diagnosed with parvo,” Dr. Trust explained, “it’s too late to get insurance to cover treatment for that.”
Another note about pre-existing conditions: They apply whenever you start your insurance, including if you decide at some point to switch to a new insurer. That new insurer won’t cover any conditions that pre-exist the start of their policy, even if those conditions were covered by your earlier policy.
Cost and Premiums: Of course you’ll want to compare premiums, plus any deductibles and co-pays. Typically, on the insurer’s website, you’ll be able to tweak things like deductible amount and see how that tweak affects your premium.
Benefit Limits: Some policies limit the total amount that the insurer will pay out on your pet — maybe it’s an annual limit; maybe it’s a lifetime limit; it might even be a limit on how much the insurer will pay to treat a single condition. You may never exceed those limits. On the other hand, if nobody ever exceeded them, the insurer wouldn’t bother imposing them.
Reimbursement Percentage: Typically policies will cover a certain percentage of the vet’s fees, and that percentage could vary from 50% to 100%, based on the option you select. Obviously, choosing a higher percentage will drive up your premium.
Veterinarian choice: Some insurers may limit you to its network of veterinarians; others will let you choose any licensed vet. If you’re considering a policy that limits your choice, make sure you’re happy with the options that are presented — and keep in mind that they could change over the life of your pet.
Claims Process: Most insurers pay you, not your vet, and they will ask you to submit a claim that includes medical records and receipts. You want a claims system that’s easy to use and one where the process is fair and fast.
Pre-Approval: Some insurers will pre-approve a treatment plan prepared by your vet. The vet can submit information about diagnosis, medical history, and planned treatment. The insurer will review the plan and let you know in advance what will be covered. With an expensive treatment plan, it can be really comforting to know up-front that you’ll be reimbursed.
“When a client comes in with a sick pet,” Dr. Trust told us, “we can provide a treatment plan, send it to Trupanion [a pet insurance company], they'll review it, and they'll say, ‘Ok, we'll cover all of that’.”
Reputation: See what reviews and other information you can find online about your potential insurer. Be especially attuned to people who report problems with claims processing. You might also check with your vet, with the understanding that vets don’t have the kind of direct contact with pet insurance companies that your personal physician has with your medical insurance company.
Like most vets, he recommends having pet insurance:
“It's something that most of us advocate,” he told me, “but it's also not something we're pushing -- I don't hand out flyers or anything.”
With insurance, he explained, “if your pet gets sick, we can do what we deem medically necessary to diagnose and treat to get the best outcome.”
“For example,” he said, “being treated for pancreatitis, including hospitalization, could cost one, two, or three thousand dollars. Or if your dog eats bones that have to be surgically removed, that could cost three, four, or five thousand, depending on whether the surgery is routine or not routine. Most insurance will cover that.”
Without insurance, he says, it’s sometimes not even possible to run some of the necessary diagnostics to determine what’s wrong.
HOW IT WORKS
The first thing to know about pet insurance is that it works differently from your personal medical insurance.
When you go to the doctor, your doctor submits an insurance claim on your behalf; you just pay the doctor whatever copay or deductible is required by your policy. You’re never out-of-pocket while waiting for reimbursement.
Most (but not all) pet insurance, on the other hand, requires that you pay the vet, and then you submit a claim to the insurance company and wait for them to reimburse you.
This means you will, even with insurance, have some level of concern about the cost of your pet’s medical treatment. First, you’ll have to front the money, and it might take you a couple of months to get that money back. But second, and a bit scarier, is the concern that the insurance company might deny some or part of your claim, leaving you out-of-pocket for that treatment.
In addition, like human health insurance, the insurance for your pet has rules that limit what you’ll recover — rules about pre-existing conditions, deductibles, and covered and not-covered conditions, and covered and not-covered treatments. A lot of policies also set maximum amounts that they’ll pay out in a year or over the lifetime of your policy. There may even be a limit to how much the company will pay for treating a single condition.
CHOOSING A PLAN
Not all policies work the same. Different companies have different rules. Even a single company may offer multiple policies with differences in deductibles, covered conditions, and maximum coverage totals.
SOME PRACTICAL EXAMPLES
It can be hard to compare pet insurance companies in a general way. What’s best for you can vary based on your pet’s breed and age, your desired deductible, your preferred coverage percentage and payout limits — even your zip code.
There’s not much point, therefore, in trying to recommend a specific company or plan. You really need to get online and check some options.
In preparing this article, I did a bit of that, and I learned a few things that are worth sharing.
Trupanion and Fetch
Our vet didn’t make any recommendations, but when he cited examples of desirable pet insurance features, I noticed that he often mentioned Trupanion. For that reason I took a look at Trupanion. I also looked at Fetch, the insurer we had for Micky throughout his life.
In both cases, I used the insurer’s website to get a quote for the premium we’d pay for Micky if we had just adopted him and he were coming home with us today. I created a profile of a dog who was eleven weeks old, mixed breed, and expected to be a mid-sized adult (twenty to fifty pounds).
The quote I received from Fetch was for $41 per month with 90% reimbursement, a $300 deductible, and a $15,000 maximum annual payout. That’s the premium for a puppy, and, with Fetch, that premium will increase as your pup ages.
Note that I could have gotten a lower premium if I had chosen a lower reimbursement percentage, a higher deductible, and a lower maximum annual payout. I chose the options I did in order to make the policy more nearly comparable to Trupanion’s, which takes a slightly different approach.
My Trupanion quote had no cap of any kind on my payout — no per incident limit, no annual limit, and no lifetime limit.
Trupanion doesn’t cover your vet’s basic exam fee (which Fetch does), but it also doesn’t charge a deductible. Based on our experience with Micky, we might actually have saved a bit with Trupanion’s approach, although not very much.
On paper, the coverage and exclusions for the two companies looked similar.
There was one huge difference: the premium and how it’s calculated.
The Trupanion premium ($92) was more than double the premium quoted by Fetch. However, that masks a critical difference. The Trupanion premium will remain relatively stable throughout your pet’s life, while the Fetch premium is age-based.
With Fetch, in the last years of Micky’s life we were paying more than $200 per month, because his premium was based on his age group.
Trupanion, on the other hand, always bases your premium on your pet’s age at the time of enrollment. Because we enrolled Micky as a puppy, we would have paid a puppy premium for the rest of his life. This doesn’t mean your premium won’t increase — premiums sometimes get adjusted at any age level — but it will never go up just because your pet ages into an older cohort.
Another major difference between the companies relates to how your claim is handled.
Trupanion will pay your vet directly, on the spot, when you’re checking out after a visit. This requires that your vet have a software connection to Trupanion (ours does), but it means you don’t have to front the money for the insurance company, and you don’t have to go through the tedious process of filing a claim.
In our experience, Fetch was slow to pay, and the claims department seemed to exist for the purpose of reducing payouts. When we first insured Micky the company was named PetPlan, and it paid claims promptly and generously. At some point, PetPlan rebranded itself as Fetch, service declined, and reviews of our claims became more technical and stingy.
We eventually cancelled the policy, when it stopped making sense. In the last months of his life, Micky developed a lump on his chest, and we took him to see Dr. Trust. He told us that there was a good chance the lump was benign, based on Micky’s history, but even if it wasn’t, he wouldn’t recommend surgery or any other significant intervention. Such treatment wouldn’t appreciably extend Micky’s life, and it would cause him pain. We therefore skipped a biopsy and cancelled the insurance.
Options
I haven’t evaluated a lot of pet insurance companies, but there are plenty of them out there (Dr. Trust told us that he’s currently buying a house, and when he was looking at home insurance, the carrier was also promoting pet insurance).
Here are a few I found:
Fetch Pet Insurance (formerly PetPlan)
MetLife Pet Insurance (formerly PetFirst)
These aren’t recommendations, just a starting point for your review. When you’re making a choice, be sure to consider all the factors — price, coverage, exclusions, waiting period, claims handling, and so on. Also, once you’ve made a pick, you should get a copy of the policy, read it, and make sure it doesn’t change your understanding of what the marketing materials tell you.
Jim Feuerstein is co-editor of LNF Weekly; he also designs and manages the website.
Not all policies work the same. Different companies have different rules. Even a single company may offer multiple, different policies.
When you pick an insurer, be sure to read the policy itself; it may change how you understand the marketing information.
You might also like...