Pet Healthcare is Costly, and Rising
The American Pet Products Association estimates that US pet expenditures hit $60.59-B last year, up from $58.04-B in Y 2014.
A substantial portion of those costs are for Vet care ($15.73-B) and medicine ($14.39-B). That breaks down to an average of $235 on routine Vet visits for dog owners and $196 for people with cats.
The Big Q: What’s driving those costs?
The Big A: Expensive new procedures, including surgery and MRIs, pet owners are choosing for their animals.
As a result, pet insurance has become a popular choice to help offset the costs of paying a veterinarian to diagnose, treat, and manage an animal’s illness or injury.
Like human insurance, pet plans include deductibles, co-pays, and premiums, with monthly premiums starting at $22 per month for a dog and $16 per month for a cat.
But a new analysis by Consumer Reports points out that such plans vary widely, have coverage limitations, may not be right for every pet owner.
“The costs rise depending on your pet’s breed (purebreds cost more to insure because they are more susceptible to some hereditary conditions), age (plans usually cost more annually as your pet ages), ZIP code (the higher cost of vet care in some areas is factored into your premium), and the coverage you choose,” the CR report’s authors note.
“Medical treatment for dogs costs more than for cats. Some plans, like ones from the ASPCA, limit coverage to ‘usual and customary costs’ based on veterinary pricing in your area.”
According to CR, the North American Pet Health Insurance Association reports that 1.4 million pets in the US and Canada are covered by insurance. That’s less than 1% of about 174-M pet cats and dogs, but up from 680,000 policies in Y 2008.
Major policy providers include the ASPCA (through Hartville), Embrace, Healthy Paws, PetFirst, Petplan, and Trupanion. Most cover only cats and dogs, but 1 company, Nationwide, also insures birds, rabbits, snakes, turtles, and other exotic animals.
If you are considering pet health insurance, below a primer based on the new CR report and other experts’ advice.
- Unlike insurance coverage for people, pet policies usually require that you pay the vet bills in full and wait for reimbursement from the insurer. But some like Trupanion can disburse payments directly to Vets on the day of service.
- Plans typically cover costs due to injuries (from accidents, for example) and illness (arthritis, cancer, and colitis). Some pay for routine care, like annual exams, flea and tick treatments, and vaccinations. 81% of pet insurance policies are accident and illness plans for dogs; 14.6% provide the same kind of coverage for cats and other pets.
- Plan costs vary by breed, age, and coverage levels you choose, such as your deductible amount. Coverage per year averaged $473 for dogs and $285 for cats in Y2014, according to trade industry figures.
- Some insurers, such as Embrace and Healthy Paws, pay a flat percentage of covered costs after your deductible is met. Embrace allows you to pick the annual maximum amount it will cover each year ($5,000-$15,000); Healthy Paws and Trupanion have no ceiling. Others calculate reimbursements based on customary costs of vet care in your area. Some policies exclude pre-existing conditions and breed-specific conditions (or charge you more to cover them).
- You can download sample policies from insurance websites for information on costs, terms, conditions, coverage, limitations, exceptions, co-payments, and even free quotes. Consider coverage with simple, percentage-based payouts. Find out how your premiums might increase as your pet ages.
CR also notes that pet insurance has become one of the fastest-growing voluntary employee benefits, with 33% Fortune 500 companies now offering it.
More than 3,800 companies and organizations have added Veterinary Pet Insurance (a Nationwide Insurance company) to their benefits portfolio, including Chipotle Mexican Grill (CMG), Deloitte LLP, Delta Airlines, Hewlett-Packard, Microsoft (MSFT), T-Mobile, UPS (UPS), and Xerox.
In addition, some companies are subsidizing a percentage of their employee’s cost, with several companies now paying as much as 100% of their employee’s pet insurance premiums.
Membership in some organizations such as AARP and AAA may provide breaks on pet insurance premiums, too.
Healthy Paws, for example, provides a 10% lifetime discount to AAA members, while PetPlan gives AARP members and active-duty or retired military personnel a 10% discount if they sign up for a plan online.
If you are not sure that you want to pay for pet insurance, there are other ways to save on healthcare costs for your pet.
- Start an emergency savings fund for pet care, just as you would for other unexpected rainy-day costs.
- If you find you need help with a big pet medical bill, the Humane Society has a list of organizations that may help pay for it.
- Take steps to keep your pet healthy to trim medical costs, such as guarding against parasites like fleas that can cause life-threatening anemia and ticks that can spread Lyme disease and Rocky Mountain spotted fever. Inexpensive topical solutions can keep the bugs at bay.
- Talk with your Vet about the medical costs your pet’s breed is likely to incur, you can also ask about his or experience with different pet insurers.
- Ask your vet which vaccines you can skip. Some effectively prevent serious and costly diseases, but others like ringworm, for example are mild conditions for which vaccines aren’t very effective.
- Spay or neuter your pet. Doing so can help prevent health problems, including some cancers. Many shelters or chapters of the ASPCA provide low-cost or no-cost spay or neuter surgery.
The above will help you decide if pet healthcare insurance is right for you.
For the full CR go here: http://www.consumerreports.org/pet-products/is-pet-insurance-worth-cost/