Is Pet Health Insurance Worth the Price?
March 13, 2008 - Wall Street Journal
By Suzanne Barlyn
Barlyn, Suzanne. "Is Pet Health Insurance Worth the Price?" Wall Street Journal.
We Take Out Policies On 2 Cats and 2 Dogs; Funds for Oscar's Fleas
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.
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)1, 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 20101.
1"Industry Statistics & Trends." American Pet Products Association (APPA). 2008. Web.
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. 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.
We enrolled Kimba, a seemingly healthy, 15-year-old mixed-breed cat, under a[n ASPCA] 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).
