Why is pet insurance so polarizing?
An updated pet health insurance policy was adopted during the American Veterinary Medical Association House of Delegates meeting in August 2019. The policy added 16 words: “and encourages veterinary healthcare teams to proactively educate their clients about the existence of such resources.”
While the policy change was reported in veterinary publications, it drew little attention until the marketing department of one insurance company decided to highlight the changes in an outreach campaign to the veterinary community. The resulting furor created robust conversation on the online message boards of the Veterinary Information Network, with advocates for and those firmly against pet health insurance weighing in.
Looking through the lens of my experiences as a former hospital owner, a still-practicing veterinarian, a veterinary business consultant, a pet health insurance company executive and a licensed insurance agent, the commentary was thought-provoking.
Among those with an anti-pet-insurance stance were two resounding themes:
- Fear that pet health insurance will evolve into a human health care-like model.
- Uncertainty regarding the role of the veterinary professional in the insurance process.
To address the first fear, one needs to understand that human health insurance is classified as an accident and health (A/H) product. Most commonly, the contract for A/H insurance is between the insurance provider (the company or government) and the organization through whom the insurer agrees to provide services, such as an employer or professional association. In this case, the voice of the individual policyholder is minimized.
In contrast, because pets are legally classified as property, pet health insurance is a property insurance product. Property insurance includes risk coverage for homes, cars and other personal belongings. Pet health insurance represents a very small portion of the entire property insurance market. This is an important distinction because with property insurance the contract is between the insurance provider and the pet owner. The pet owner interacts directly with the insurance company to determine the policy specifics, such as types of coverage (accident, illness, wellness), the amount of coverage, and the deductible and co-insurance amounts. There is no need for an intermediary to deliver the plans, as with A/H insurance.
As long as pets remain classified as property, there is no reason to believe that this category of insurance coverage will change, thus protecting the independence of clients to choose the best product for their needs. As a result of this relationship, no mechanism exists for pet insurance companies to interfere with veterinarians’ recommendations regarding patient care.
Understandably, confusion reigns regarding how pet health insurance is discussed in veterinary hospitals, as pet insurance is a highly regulated product. Each state has a department of insurance that reviews and approves proposed products. Within the framework of these regulations are state-by-state differences in how pet insurance can be promoted to pet owners.
Generally speaking, veterinary teams:
- May dispense brochures and other general information as long as no conversation relating to the terms of the contract occurs.
- Can endorse the idea that pet health insurance is a useful tool.
- May submit claims on behalf of the client and send medical records as requested by the insurance company.
- Can share stories about how their clients benefitted from pet health insurance, including how it helped in the payment of veterinary expenses and enhanced the clients’ ability to provide desired care for their pets.
In my opinion, the best thing veterinarians can do is to keep it simple. They should endorse the idea that pet health insurance is a helpful tool in helping the client provide care for their pets. These discussions are simple. For example:
“Many of our clients have found pet health insurance to be helpful in providing medical services to their pets. We believe that part of being a responsible partner in your pet’s health is to make you aware of tools that can help you provide care to your pets. Here are a couple of brochures from companies that our clients have been happy with. We encourage that you call them to learn more about their products and coverage.”
Rolled into the concern about what veterinary teams can say about pet health insurance is the larger question of “Should we be educating clients about pet health insurance”? How many times in the veterinary profession have we been passive about client education only to see other entities step in to provide information, options and services to our clients? Are we also abdicating our nascent role in educating clients about the benefits of pet health insurance?
Clients look to us to help provide guidance in caring for their beloved pets and to form partnerships in this common interest. I firmly believe that it is incumbent upon us as health care professionals to educate clients early about the cost of pet ownership and communicate information about tools that will help them provide great care to their pets. These tools include wellness plans, pet health insurance and third-party payer options.
As advances in veterinary care continue to evolve, the costs of care will outpace clients’ ability to pay. What will the long-term costs of such financial constraints be to the pet, pet owner and the veterinary profession?
Dr. Wendy Hauser is assistant vice president of veterinary relations at Crum & Forster Pet Insurance Group and the founder of Peak Veterinary Consulting. She is a member of the AVMA Economic Advisory Research Council and its pet insurance subcommittee.