As the debate around human healthcare insurance currently dominates our lives in the United States, it’s worth asking relevant questions about insurance options for the pets we treat. As veterinary care continues to advance, so do the associated costs, which undoubtedly impact “best possible care” options. Pets are legally considered to be the property of their owners, so pet insurance is similar to car or homeowner’s insurance. It falls under the Property and Casualty classification and functions as indemnity insurance, which means it operates very differently than the human managed-care model we are all familiar with. However, it has been reported that an inhibiting factor to the growth of pet health insurance (PHI) in the United States is a prevailing fear among veterinarians that widespread use will result in a managed-care system. Are we really on that path?
The first pet insurance policy was written in 1890 by Claes Virgin, who was the founder of Länsförsäkrings Alliance, and was initially focused on just horses and livestock. In 1947, the first pet insurance policy was sold in the United Kingdom, a country second only to Sweden in its level of pet insurance coverage (approximately 23%). In the United States, only approximately 0.7% of pets are covered according to the US Department of Clinical Veterinary Science and the Pet Food Institute. However, a recent survey by the Associated Press found that 41% of US pet owners are extremely or somewhat worried that they could not afford the medical bills for a sick pet.
Why should there be such a drastic difference in the level of PHI coverage between countries, especially when you consider that the concept of purchasing healthcare insurance is much less culturally accepted in Europe than it is in America? Is there a simple, explicable difference between the mindset of a pet owner in the two regions when it comes to healthcare? Few places provide answers.
In 2007, the North American Pet Health Insurance Association (NAPHIA) was created as a reputable, centralized organization to represent the interests of PHI companies in the United States and Canada, and advocate for the collective PHI industry. In 2016, NAPHIA undertook a comprehensive research initiative focusing on both pet owners and veterinarians and their beliefs and activities around PHI. This report can be downloaded in full from the website naphia.org/veterinary-professionals. Although there is a broad awareness of PHI among the veterinary community based on this survey, there is still a high level of uncertainty regarding the details of the products available, which creates a hesitancy to discuss PHI with our clients. There is also a significant portion of veterinarians who don’t recommend PHI based on perceived economic or time burdens. Furthermore, more than 40% of veterinarians questioned believed that it makes no difference to them whether clients have a PHI product or not. Remarkably, only 5% of respondents believed that PHI companies will have too much influence in the veterinary profession if it becomes commonplace. So what is it that’s really stopping us from embracing a degree of financial certainty when it comes to the payment for the services we provide as a profession?
For a considerable period of time, the AVMA has endorsed the concept of PHI. It recognizes that viable PHI programs will be important to the veterinary profession’s ability to continue to provide high-quality services. Of course, guidelines should be in place to ensure that individual programs work in the best interests of our profession and our clients. Such guidelines have been published by the AVMA and include the requirement of a veterinarian/client/patient relationship, never interfering with the veterinarian’s fee structures, and being transparent about how the terms and conditions of their plans will impact coverage and costs.
It is obvious that the benefits of PHI can only be determined by individual owners and their circumstances. However, despite existing doubts about the overall financial benefits of PHI policies, there is certainty that at some point in their life, most pets will need medical care, and that the good care we provide is not free.