This subject springs to my mind this month
because my friend got a free kitten for Christmas last year.
Her daughter had rescued him from a dumpster.
His name is Charlie.
More on Charlie later.
According to industry statistics $13 Billion (yes, that is a “B”) was spent in 2010 on veterinarian care for pets in 73 million households; a 40% increase over 2006. In 2006 there were about 86 million cats in the U.S. If they could vote, and did so as a bloc, they would bury the 78 million dogs. With the number of pets and costs rising like that, I wondered what the pet health insurance market was like. Does the pet health insurance marketplace have lessons, or even “best practices”, for us in our struggle with health insurance costs and coverage for humans? Is it time for an Affordable Care Act for pets? I decided to take a look.
As I surfed through pet health insurance plans I was struck by the similarities to our (human) health insurance plans of the 70′s and 80′s. The subscriber pays the vet and gets reimbursed 90% of “usual and customary” fees. The companies promise “quick-turn around” of claims, of course. The vet has no forms to fill out or sign. The subscriber does it all. These familiar phrases sound like “the good old days” to physicians who now have two or more full-time office people filling out all sorts of insurance billing forms and/or an IT consultant to do it electronically.
You can go to any licensed vet. There is no concern about “eligible providers” or being “out of network”, but policies do differ from state to state. Reimbursement is not dependent on diagnosis (no need for bulky code books or sophisticated computer programs). None of the policies cover pre-existing conditions or preventative care services (routine visits to the vet). Those are optional coverages available for additional premium.
It all sounds pretty simple and straight forward until you start reading more closely. An asterisk here and a double asterisk there sends you to fine-print footnotes defining “eligibility criteria”, “waiting periods”, “continuing care”, “pre-existing conditions”, and “congenital conditions”. That’s not only identical to our “good old days”, but it also holds true today.
A neighbor just spent $400 on the annual visit and necessary vaccines for his three Labradors. When I asked him if he had health insurance for them, he replied, “No way was I going to spend all that time figuring out what they covered, and when, and for how much. It was too complicated. I struggle enough trying to understand the policies I buy for my employees.”
Pet health insurance was started in Sweden in 1924 and was adopted in the U.K. around 1947. The first pet insurance policy in the U.S. was written in 1982 for the protection of our TV hero Lassie. (Do Socialist countries always lead the way in developing health insurance plans?) NAPHIA, North American Pet Health Insurance Association, was founded in 2007. In Canada there are 10 cat health insurance plans while in the U.S. you have the choice of 36 plans for cats. (Capitalism is so-o-o predictable sometimes)
Back to Charlie….Remember Charlie?….This is a blog about Charlie.
He is an extremely cute, solid black kitten that made my friend’s last year’s Christmas stocking begin to wiggle. When his head popped out with those big, wide open green eyes, the mystery of the stocking was over, and the love affair began. Health insurance for him was available after a mandatory 30-day waiting period (the insurance company wanted to be sure he survived that long I guess). The waiting period for coverage of “congenital conditions” is 180 days, presumably for the same reason. It would cost from $4.08 per month to $67.14 per month depending on coverage options, BUT excluded preventative care and routine visits to the vet. After reading Consumer Reports my friend decided not to buy any.
The first visit to the vet cost $103.75. That included $26.00 for a FVRCP shot against Feline Viral Rhinotracheitis, aka “a bad cold”, and $21.75 for a fecal specimen exam. The second visit a month later was $161, and the third month it was $277. That one was higher because of the anesthesia charge for the neutering ($36.00) and a Catalyst Chem 10 test ($62.00). The lab business for pet tests seems as lucrative as for our tests. The neutering operation itself seemed like a bargain at $50.50. It was only slightly higher than the placement of the ID microchip under his skin. (ER docs and police eat your hearts out! The technology is here.)
Rather than continue to bore you with the details, suffice it to say, my friend’s “free” kitten cost over $500 for vet visits in the first year alone. I am not even going to try to total up all the other costs because someone else already has. According to a 2010-2011 survey the average annual maintenance cost of a cat in the U.S. is $1217.
Maybe a “free kitten” should have been included in my list of Christmas presents to give your enemies rather than your friends. But as the commercial says:
” Vet visits -$500…
Food for a year – $400…
Having Charlie’s warm meows greet you when you return home or when you awake in the morning – Priceless!”