How Does Pet Insurance Fit Into the Access-to-Care Conversation?

Pets are considered part of the family by most pet owners and veterinarians. Barriers to veterinary care for those pets, however, are common and negatively impact the mental, emotional, and physical health of both pet owners and veterinary professionals. The Access to Veterinary Care Coalition found that 28% of pet owners were unable to receive veterinary care in the preceding 2 years.¹ While many barriers were explored, the most common obstacle was financial.¹

With the growing costs of care, more families are likely to be impacted in the future. One survey found that for 25% of pet owners, an unexpected bill of $250 would cause financial hardship.² In an industry that operates on a cash basis, solutions are needed that will allow veterinarians and their teams to offer care to more pets. Pet insurance may be part of that solution.

Understanding Pet Insurance

The U.S. pet insurance market is growing rapidly, with 22.1% growth in total pets insured from 2021 to 2022.³ At the end of 2022, 4.8 million dogs and cats in the United States were insured.³ The majority of the plans were for dogs, representing 80.1% of policies, with cats representing the remaining 19.9%.³ Despite this annual growth, which has been fairly steady over the past 5 years, only an estimated 3% of U.S. dogs and cats are insured. Part of this low level of insurance may be due to a lack of awareness on the part of pet owners.

Veterinary teams should be familiar with the basics of how pet insurance operates so that they can provide an introduction, answer general questions, and point pet owners in the direction of reliable sources to learn more.

“Most pet insurance is a truly open network,” said Ryan Champagne, director of veterinary division at Pawlicy Advisor, a pet insurance comparison tool recommended by the American Animal Hospital Association. Pet owners can purchase a policy and go to any clinic without worrying whether their plan will be accepted. However, most companies operate on a reimbursement model instead of providing direct payment to the clinic. Pet owners pay the initial bill out of pocket, then submit their claim and receive reimbursement for covered expenses.

A wide variety of pet insurance plans are available in the United States, with 25 different companies providing a variety of pet insurance products.¹ Plans are available as accident-only, which covers conditions such as foreign body ingestion, trauma, and toxin ingestion; or accident and illness, which also covers metabolic diseases, neoplasia, and other chronic diseases. Some plans also offer an add-on wellness coverage option for preventive care expenses. Veterinarians should encourage clients to discuss with the insurance carrier which expenses will be covered and which will be excluded. “We don’t want [clients] crossing their fingers and hoping something is covered,” Champagne said.

In general, pet owners will pay a monthly fee (known as a “premium”) for a given policy. Premiums will vary based on the deductible and reimbursement amount, which is traditionally 50%, 70%, or 90% of covered expenses. Costs are also affected by breed, geography, age of pet, and preexisting conditions. Plans vary based on many factors, including the amount of customization in the reimbursement and deductible amounts, waiting periods, and claim-processing time.

How Can Pet Insurance Improve Access to Care?

“Pet insurance has long been recognized as a method for increasing access to care,” said Emily M. Tincher, DVM, senior director of pet health at Nationwide. “The challenge of the pet health industry is that many insurance products are most helpful for those who can already afford some level of care.” While pet insurance may not be ideal for everyone for this reason, Tincher notes that it often allows care to be provided for pets that “may have otherwise been out of reach.”

Part of the growing costs of pet health care come from continued advancements in veterinary medicine. While specialty medicine and advanced-level options may be considered gold standard, there are often many acceptable diagnostic and treatment options available, which represent what is often referred to as the spectrum of care.

The spectrum of care is a growing concept in veterinary medicine that looks at care as a continuum, with the most advanced—and often more invasive and expensive—treatments at an end and the less extensive, less costly treatments at the other. Somewhere along this continuum, the best option for each individual pet family exists. This “best” option will maximize patient comfort and quality of life while meeting the client’s goals of care within their own socioeconomic, emotional, and physical limitations. It is the veterinarian’s duty to work with pet families to present the available options and determine the right fit.

Nationwide is a pet insurance provider that advocates for a spectrum-of-care approach. “Nationwide offers a range of pet protection solutions that help meet different pet families’ priorities, budgets, and preferences,” Tincher said. Their range of pet protection products goes beyond the traditional reimbursement-based coverage and includes a more basic plan that utilizes a benefit schedule that is designed to cover the average costs of care for a given medical condition. With this insurance approach, pet parents can customize their plans to fit their specific needs. “That way,” Tincher said, “when presented with a range of evidence-based options for their pet’s care, they can make the choice based on what’s right for their family and their pet, rather than on the impact it will have on their savings.”

For example, a patient with pancreatitis can be treated in many ways. Most pets respond well to outpatient supportive care or a brief hospitalization with nutritional and lifestyle adjustments. Rarely, patients experience severe disease requiring prolonged hospitalization in an ICU setting. “A client enrolled in Nationwide’s benefits schedule–based protection plan could receive a payout that would cover most average costs for treating pancreatitis,” Tincher explained, “but the payout on this type of plan would likely not cover all the expenses associated with an extended ICU stay.”

Talking Pet Insurance with Clients

So how should veterinary professionals discuss pet insurance with the owners of 97% of pets who do not have pet insurance? Tincher suggests framing the conversation in the larger context of financial planning for pet health care. Many pet owners are unprepared for the costs of pet ownership. A recent survey found that 45% of dog owners and 38% of cat owners thought they were prepared for the investment of pet ownership and found that they were not.²

“No one wants to think about what could go wrong when they’re coming in for a new puppy exam,” Tincher said, but discussing how to prepare for future costs can “help pet owners decide what kind of financial planning might be important to them.”

When introducing clients to the idea of pet insurance, here are some key education points that veterinary teams can provide:

• Pet insurance operates on a reimbursement basis; therefore, clients should have a plan for how to cover the initial expenses.
• Clients should be aware of waiting periods before coverage begins and not expect immediate protection.
• Many preexisting conditions are excluded. Veterinarians can educate clients on what conditions their pet already has that should be discussed with the insurance provider to determine if the condition will be covered.
• There will be no one-size-fits-all pet insurance plan for every family; therefore, it is important to research the available options and consider the cost over the lifetime of each pet.
• Pet insurance may not be the right fit for every client, but clients should still make a plan for both routine veterinary care and unexpected expenses.

Because insurance is regulated at both the state and national levels, Champagne encourages veterinary teams to have general discussions with their clients to raise awareness of pet insurance but “mitigate their risk and liability” by recommending pet owners speak to an insurance broker or individual insurance providers to discuss plan specifics. Clinics “can say that [they’ve] had a good experience with a company but let [the client] know there are many options, and they should explore what is the right fit for their unique pet and personal circumstance,” Champagne said.

Looking to the Future

Veterinary professionals did not enter the industry to turn pet owners away, yet over 50% of veterinarians face client financial limitations that impact the way they treat pets on a daily basis.⁴ In some cases, such as the puppy with parvovirus, the blocked cat, or the 2-year-old dog with a foreign body, owners are forced to make the difficult decision to euthanize when finances cannot be found for treatment. Working within financial limitations, and particularly economic euthanasia, are contributing factors to burnout for many veterinary professionals.^4,5 For the sake of our patients, our clients, and our own professionals, the veterinary industry must find ways to improve access to care.

Overcoming financial barriers to veterinary care will require a combination of solutions. Industry stakeholders are exploring different options that can be offered in individual clinics as well as across the industry, including third-party financing, in-clinic payment plans, and subsidized care. Increasing pet owner awareness of pet insurance is a part of this complex solution that every veterinary professional can embrace at the local level.

Read more on articles on pet insurance at Today’s Veterinary Business