Monday, May 10, 2010

Health Insurance for Your Dog: Is It Worth It? Part 1

I know a lot of people who have dogs, but frankly I don't know that any of them have pet insurance. And yet when Joey was injured, we heard people ask, "Do you have pet insurance?"  The internet is pulsing with ads for pet insurance.

Right from the start, I'm saying that we never got Joey health insurance. Do we wish we had? Would we recommend pet insurance?

We are going to begin a short series on this question: Pet Insurance:  Is It Worth It?

First, Joey - and I hope I'm not putting a curse on him by saying this - never was sick one day in his life!  For the most part, until he was hit by the car, his medical care was entirely routine.

The worst medical condition he had was an occasionally skin allergy in the winter, that the veterinarian said was due to the long dry New England winter and his lack of being outside.  (And we solved that problem: After Joey got hit by the car, we started putting Omega 3 oils in his food once per day to help his skin heal and presto, by the next long and hard New England winter, he had only minimal skin dryness!)

So when Joey got hit by the car, and even that first day cost us a pretty penny, naturally we started wondering if we'd made a mistake, if we should have gotten our dog health insurance a long time ago, and we started wondering if it was worth it for us to get it from that point going forward (with the understanding that it would not cover any costs related to his accident).

Even that first day!  We had a fee at the first and local animal hospital that stabilized Joey, then the second and larger 24-hour animal medical center provided acute emergency care, diagnosis, etc.  Joey was in the Intensive Care Unit for 5 days, during which time he had, among other care, dental surgery.

Now, if your pet has an emergency, when you go into the animal medical center, before they will even admit your dog or cat, they will consult a doctor and create a maximum and minimum estimate of charges.  You must have that amount of money in your account or on a credit card account before they will administer your pet and provide emergency services. Your credit care is not actually charged; it's kind of like making a reservation at a hotel. They want to make sure you have the money, but you are not actually charged until the service is provided.

So let's go back to pet insurance. We went online and chose one very well-known company to obtain a free quote. We put in for the maximum coverage: Common Problems, Panic-Moment Problems (aha, here is where our dog gets hit by a car), expensive problems (which includes chemotherapy), routine care, additional care (?) and enhanced cancer care: Hocus Pocus and we have the figure $62. per month. Now do the real math.  Okay, over one year that's $744. Over a period of ten years, that's $7445. Hey, that's Joey's age!  Over a period of 15 years thats $11,160.

So a person would have to have $11,160 in medical bills (and that's after any deductibles and/or co-pays are paid) on medical expenses related to your dog to just break even after 10 years.

Now the caveat is "Pre-existing conditions including congenital defects or diseases". 

Here's where it gets tricky. What exactly is a congenital defect considered to be? Or a congenital disease? And what are the congenital defects and congenital diseases that YOUR dog might have been born with, or might develop, for which you will not be covered?

On a Labrador Retriever, the ever-so-common Hip Dysplasia is considered to be a congenital disease and is therefore not covered!  Did I see a list of exclusions for each breed - what is considered to be a congenital defect - on this website???? Did I hear any of you say "No"?

We looked at another dog medical insurance. In the rolling sidebar, it gave the following example, intended to surely hook you in to the great savings offered by getting pet health insurance:

Example #1:

"Treated for: Colon Cancer Claim Paid: $2647.xx Monthly Premium: $42.xx

Do the math.  This person was paying $507. per month for health insurance for his dog.  So if his dog got colon cancer when he or she was five years old, the dog's owner would have broken even, and if he/she'd gotten colon cancer after that age the owner would have saved money by having pet health insurance. But in our pet insurance's example, how old was the dog when he or she got cancer?  We don't know that!  We aren't told this!  Most dogs don't get colon cancer when they are 5 years old, although Joey's mom was an exception and got cancer and died when she was four. (Cancer is common among Labrador Retrievers, but not so common among other breeds.) So maybe this owner would have done better putting his money in a bank account every month and using it when needed, if needed, and taking that statistical chance.

Example #2:

Treated for: Cruciate Ligament Tear Claim Paid: $2633.xx Monthly Prem.: $37.xx
Do the math.  This pet owner was paying, per year, $444. How old was the dog when he got the ligament tear, or how many years was the person paying for this insurance?  At 5-1/2 years old, the owner was breaking even.  Before that, the owner was saving money. After that, the insurance company was coming out ahead. 

Be a smart shopper.  Be a smart pet owner.
When you see these ads enticing you to purchase health insurance for your dog or cat, do the math - first.
And then there is the question from above: the exclusions for a "congenital defect" and a "pre-existing condition"!  In another post, we're going to take a deeper look at this question: For dogs, what is a "congenital defect and what is a congenital defect or disease considered to be, by these insurance companies?

Part 2: Money Up Front!

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