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Pet Health Insurance
The
increasing popularity of pet health insurance has led to
more companies touting the “best value” which often means the most fine
print.
And this can lead to unsuspecting buyers owning a policy that may not cover…
- A condition that your dog already has
- Older dogs
- Certain breeds
- Services received at your local veterinarian
- Vet bills over a certain amount
First, are you an insurance novice or an expert that’s ready to see
your options?
We’ll guide you from the basics of insurance to selecting the right
pet
health insurance plan for you.
Click one of the following depending on where you are in the process…
- The pros and cons
of pet insurance
- Types pet health
insurance
- Components
and provisions of pet insurance and what they mean to you
- Pet
insurance reviews by plan type and company
The Pros
and Cons of Pet Health Insurance
| Pros |
Cons |
| There is no need to decide what to do if
and when your pet becomes sick - you automatically have coverage. |
If your dog never gets sick or hurt, you
still have to pay the monthly or annual premiums. |
| It allows you to take your focus off of the
cost
of pet care and put it on to the treatment
that is best for your dog. |
If
you don’t do the necessary research, you could end up with a policy
that you don’t understand or that doesn’t cover what you think it
covers...
...which won’t happen because you are here. As long as you
read all
of our advice and recommendations, that is! |
| Accidents and illness can cost thousands of
dollars. Can you pay if
something bad should happen? Pet health insurance helps to
remove this
concern. |
To us, the pros greatly outweigh the cons, especially considering that:
- Advances in the field of animal medicine have
been exponential in past decades allowing veterinarians to successfully
treat conditions that were previously considered
untreatable. With these advances comes an
escalating cost of veterinary care.
- It is estimated that North American pet
guardians now spend over $10 billion a year on healthcare for their
pets.
- One in three pets will need emergency
veterinary treatment every year.
- Two out of every three pets experience a
significant health problem during their lifetime.
(back to top of Pet Health
Insurance)
Types
of Pet Health Insurance
Your first step in deciding which pet health insurance is right for you
is to understand the different types…
- Traditional
Pet Health Insurance – this is probably what you had in
mind when you started your research. With traditional pet
insurance, you choose a particular plan and pay a premium every month
to the insurance company. When your pet receives treatment,
your insurance company will pay part or all of the bill depending on
the
plan.
 Traditional plans can cover accidents,
illnesses and
sometimes even preventive care such as immunizations.
- Customizable
Pet Health Insurance is just like traditional pet
insurance, except you are allowed to choose the levels of coverage and
in some cases what is actually included under the plan.
- Accident
Only Plans are also just like the traditional plans,
except only accidents are covered. There will be no coverage
for anything else, including illnesses or preventive treatment.
- Discount
Plan – with this kind of plan you pay a fee to have access
to a network of veterinarians. As long as your pet is treated
at a vet on the list, your bill will be discounted by a set
percentage. If your vet is not on the list, you can usually
ask them to join.
Example:
25% Discount Plan at Participating Vets. If your vet
participates in the insurance company’s network and they charge you
$100 for a visit, you will only pay $75 due to the 25% discount.
To give you as close of an apples to apples – or should I say
“milkbones to milkbones” - comparison as possible, following is a sample
scenario and what your out of pocket costs might be for each type of
plan:
Sample
Scenario: Your vet charges you $2,000 for treating your
dog for a specific illness.
Here are some sample plan provisions by plan type and your out of
pocket expenses for each...
| . |
Traditional |
Customizable |
Accident
Only |
Discount |
| Plan
Design |
$100
Deductible
80% Coinsurance |
$100
Deductible
80% Coinsurance |
$100
Deductible
80% Coinsurance |
25%
Discount at Participating Vets |
| Vet
Bill |
$2,000 |
$2,000 |
$2,000 |
$2,000 |
| Deductible
– You Pay |
$100 |
$100 |
Bill not covered because vet care was for an
illness. Coverage is only for accidents. |
n/a |
| Remaining
Balance |
$1,900 |
$1,900 |
$2,000 |
| Coinsurance
– Insurance Company Pays |
80%
($1,520) |
80%
($1,520) |
n/a |
| Discount
off of billed charges |
n/a |
n/a |
25%
($2,000 X .25 = $500) |
| Your Net
Out of Pocket Costs |
$380
($1,900 - $1,520) |
$380
($1,900 - $1,520) |
$2,000 |
$1,500 |
When evaluating the above differences, don't forget to take into
account...
- For
the Traditional plan, you choose from a list of “cookie
cutter” plans where all of the plan provisions are set.
- For
the Customizable plan, you choose the plan provisions such
as the deductible and coinsurance levels.
- For
the Accident Only plan, if the vet bill had been for an
accident, your net out of pocket costs
would have been the same as the traditional and customizable plans.
- For
the Discount plan, while you will typically pay more at the vet, you will probably pay less
premium per month to the insurance
company. If your pet does not qualify for the other kinds of
insurance
this will still give you an opportunity you to reduce your vet bills.
(back to top
of Pet Health Insurance)
If you already know the ropes when it comes to insurance terminology, click
here to jump straight to the pet insurance reviews.
Otherwise it's on to the most fun and interesting topic you
can imagine...
Components
& Provisions of Pet Health Insurance and What They Mean to You
Much of the fine print included in the insurance contracts is there to
give you a lower rate. While that can be good for your
monthly expenses, it can be a nightmare if something bad happens and
you find out afterwards that your dog is not covered.
Let’s cover some insurance terminology and how the words affect you.
Either click the words in the chart to jump straight to the definition
or review from top to bottom...
- Accidental Death –
pays you should your pet die from injuries as a result of an untreated
accident
- Age Restriction or Age Limit
– if either of these are included in the plan, your dog will either not
be covered or have less coverage if he falls within a specific age
range identified in the fine print.
- Boarding Kennel Fee Reimbursement
– Should you become hospitalized for more than a certain amount of time
and are unable to care for your pet, plan will pay for boarding or home
care up to a maximum amount.
- Breed Surcharge –
additional fees added to your bill to cover certain breeds due to those
breeds having a higher risk of certain medical conditions.
- Coinsurance or Co-pay Percentage
– the percentage of the total bill that your pet health insurance
company will pay after all deductibles and co-payments are
paid.
Example
- 80% coinsurance/co-pay percentage – for a $100 vet bill, the
insurance company will pay $80 (80%) and you pay the remaining $20
(20%).
- Co-payment (“co-pay”) dollar
amount – similar to a per incident deductible defined
below, a co-pay is the amount of money you have to pay for a specific
treatment or veterinarian visit before insurance begins.
Depending on your plan coinsurance may also apply after your co-pay.
Example
- $20 co-pay per veterinarian office visit – you must pay the first $20
of the veterinarian office visit bill before any other pet health
insurance
payments begin.
- Coverage Amount – the
maximum amount that the insurance company will pay for a specific
treatment, condition or specific duration of time (i.e. annually or for
the entire lifetime of your pet). Sometimes called “maximum
benefit” or “benefit limit.”
Example
- $3,000 coverage amount per accident – if your dog gets hurt in an
accident, the insurance company will only pay up to $3,000 for that
specific accident. If another accident occurs, you will have
up to another $3,000 of insurance.
- Deductible (per
incident or annual) – the deductible is the amount of money that you
have to pay before your pet health insurance company will start paying
anything. Your insurance coverage does not begin until you
pay the deductible amount.
Deductibles
can apply to all treatment for the year (nothing is covered until you
pay the deductible amount), to specific incidents (you have to pay a
deductible amount for a certain condition or treatment before insurance
kicks in) or both (you pay your deductible for the year, then the
deductible for the incident, then insurance coverage begins).
A per incident deductible is just like a co-pay, whereas a per year
deductible only applies once for the entire year.
Example
- $500 annual deductible, $100 per incident deductible, 100% coverage
after deductibles - policy goes into affect
January. On February 12th, your dog has surgery that costs
$2,000. You pay $500 to satisfy the annual deductible plus
$100 for the per incident deductible, then your insurance pays for some
or all of the remaining $1,400 depending on your plan’s coinsurance
percentage. If your dog has a second surgery in August, you
only pay the $100 per incident deductible before insurance begins since
the $500 annual deductible was already satisfied.
Let’s look at that in a chart to make it easier to understand…
| February 12th Surgery |
$2,000 |
| $500 Annual Deductible (you pay) |
-$500 |
| $100 Per Incident Deductible (you pay) |
-$100 |
Remainder (since 100% coverage after
deductibles, insurance company pays) |
$1,400 |
| August Surgery |
$2,000 |
$100 Per Incident Deductible Only (you pay)
You already “satisfied” the
$500 annual deductible. |
-$100 |
| Remainder (insurance company pays) |
$1,900 |
Total
out of pocket for you
Total out of pocket for insurance company
|
$700
$3,300
|
- Elective procedures and Cosmetic
surgeries – treatments that are deemed as not “medically
necessary” by the pet health insurance company. Examples
include tail docking, declawing, skin folds removal, nail trimming and
cropping of ears.
- Euthanasia – plan
pays to have your pet put to sleep should they suffer from a condition
that can not be cured.
- Exclusions –
events or items that you will be 100% liable for after you purchase the
insurance plan. This is usually a big part of the fine
print. Before you buy a plan, make sure that you completely
understand everything that excluded from (not covered by) the
plan. The following are common exclusions found in some pet
health insurance plans. If you see an
exclusion that you want covered, look for another plan:
- Behavioral problems, training, or therapy are
covered only with Preferred and Basic plans.
- Breeding or conditions related to breeding
- Congenital or hereditary defects or diseases
- Continuous coverage of chronic and long-term
conditions that manifest in a previous policy year
- Diagnostic test(s) and treatment(s) for
conditions excluded or limited by this policy and complications of
conditions excluded or limited by this policy
- During the first 12 calendar months in which
your policy is in effect, no coverage will be extended for the
diagnosis, medical management, or surgical correction of anterior
cruciate ligament (ACL) or cranial cruciate ligament (CCL) damage or
rupture. During the first six calendar months in which your policy is
in effect, no coverage will be extended for the diagnosis, medical
management, or surgical correction of intervertebral disc(s),
regardless of the procuring cause.
- Elective procedures and cosmetic surgeries
- Expression or removal of anal glands or anal
sacculitis
- Illness or injury that arises out of racing,
coursing, commercial guarding, or organized fighting of your pet
- Orthodontics, endodontics and removal of
deciduous teeth
- Pre-existing conditions
- Preventative treatments and diagnostics for,
or
conditions relating to, preventable parasites, including heartworms,
are covered only with Preferred and Basic plans.
- Routine examinations, routine tests or
screens,
and vaccines are covered only with Preferred and Basic plans.
- Spaying/neutering
- Special diets, pet food, vitamins, mineral
supplements, grooming costs and bathing
- Teeth cleaning or polishing are covered only
with the Preferred plan.
- Time and travel expenses to the
veterinarian's
premises or the hospital
- Treatment of external parasites such as
fleas,
lice, ticks and preventable internal parasites such as heartworms,
hookworms, roundworms, tapeworms and whipworms
- Maximum Benefit or Benefit Limit
– the maximum amount that the insurance company will pay for
a specific
treatment, condition or specific duration of time
(annual
or
lifetime). Same as “coverage amount.”
- Medically Necessary
– any treatment that will improve the health of your pet or prevent
future health issues. Typical treatments that are considered
NOT medically necessary include elective procedures and cosmetic
surgery.
- Network – a group
 of
veterinarians or facilities that the pet health insurance company has
contracted with for lower fees. If you take your pet to an
“in-network” veterinarian, your insurance will pay for a higher
percentage (or even all) of your bill. If your vet is
“non-network” you may get no coverage or smaller level of coverage.
Always make
sure that your vet is in your insurance company’s network before you
schedule a visit.
You should also make sure you understand how emergency services are
covered and whether you receive the same deal at all vet emergency
centers. If you have a pet emergency, be ready to take them
to the closest in-network emergency center if applicable!
- Owner Bequest – money
provided to the guardian of your pet should you predecease your pet.
- Pre-existing conditions
- Any illness or injury that your dog either shows signs of or has been
treated for before you buy the pet health insurance plan. It
also can include a condition or illness that happens within the first
30 days of having a new plan. This would include conditions that have
not yet been clearly diagnosed or are being treated with medication.
- Worst case
– you pay a lot of money out of your own pocket to have your dog
treated, then you ask your insurance company to pay you back.
Your insurance company researches the claim, finds out that your dog
showed signs of suffering from the condition before you bought the
insurance (by contacting your veterinarian and reviewing their records,
for example) and therefore denies your claim.
- Recovery Costs – plan
will pay for advertising or to offer a reward should your pet go
missing.
- Trip Cancellation –
covers the cost of canceling a trip should your pet require
life-saving medical treatment up to a certain amount of time before or
during your trip.
- Waiting Period – the
amount of time it takes for your insurance to “kick in” after your
policy goes into effect.
 Most pet health insurance plans have
between a 2 and 14 day waiting period for accidents and between 14 and
30 days for illnesses.
Example:
If your policy has a 2 day waiting period for accidents and 14 day
waiting period for illnesses and your coverage begins on January 1st,
all costs for an accident before January 3 and all costs for an illness
before January 15th will come out of your pocket. Waiting
periods are in place to make sure that people do not buy insurance
after their dog becomes sick or ill.
While they can
sound scary and unfair, waiting periods actually benefit most people by
keeping the monthly rates lower. A few bad apples out there
have caused this by taking advantage of pet health insurance
companies.
They signed up for coverage, paid one month’s worth of premiums to the
insurance company (at a low rate of $30, for example), immediately file
a claim for thousands of dollars for a problem that either already
happened or they already knew about, received reimbursement from the
insurance company, then terminated their coverage. In this
scenario the insurance company would lose thousands of dollars and have
to raise everyone else’s rates to cover the difference.
- Worst case
– your dog gets hurt in an accident the day after your coverage goes
into affect and you have to pay all treatment costs.
- Wellness Plan –
insurance will pay for annual wellness costs which may include annual
physical exams, spaying or neutering, heartworm testing, teeth cleaning
and vaccinations.
(back to top
of Pet Health Insurance)
Now let’s
move on to the more interesting stuff...
Pet insurance
reviews
by plan type and insurance company
Back
to the Organic Pet
Digest Dog Care Home Page from Pet Health Insurance
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