Transcript
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Have you ever wondered what you would do if your pet was sick or injured and you couldn't afford their treatment?
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Well, unfortunately, many, many pet parents are faced with that situation every single day.
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So much so that there's now a term that I'm hearing a lot called economic euthanasia.
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Basically, that means that the pet parent chooses to euthanize their pet primarily because of financial reasons.
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I know I never want to be in that situation and I don't want you to be either.
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Today's episode is going to share the number one thing that you can do to avoid finding yourself in this situation, so stay tuned.
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You're listening to Starlight Pet Talk, a podcast for pet parents who want the best pet care advice from cat experts, dog trainers, veterinarians and other top pet professionals who will help you live your very best life with your pets.
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We also share inspiring rescue and adoption stories from people who've taken their love of pets to the next level by getting involved in animal welfare.
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My name is Amy Castro and I'm the founder and president of Starlight Outreach and Rescue and a columnist for Pet Age Magazine.
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I've rescued thousands of animals and helped people just like you find the right pet for their family.
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My mission is to help pet parents learn all the ways that they can care for, live with and even have fun with their pets so they can live their very best lives and their pets can too.
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Welcome to Starlight Pet Talk.
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I'm your host, amy Castro, and our subject today is such an important one that I'm going to tell you right up front that I want you to share this with all of your friends and family that have pets.
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My guest today is Kristin Lynch, and she has been the executive director of NAFIA, which is the North American Pet Health Insurance Association, for about 12 years now, and Kristin started in this position as a part-time person and it has grown into a full-time position as the industry has grown and evolved, and I know I have seen that just in my experience.
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When I first started in working in veterinary medicine as a vet assistant, there was no such thing as health insurance, and then, when my years went on, a couple of companies popped up, but it still wasn't something that people were using.
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But today, I hope at the end of this episode, we have convinced every pet parent out there to investigate it for themselves and their pets, for a variety of reasons that we're going to touch on.
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So, kristin, thank you so much for making the time to be here with me today.
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Well, thank you so much for having me.
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I'm really excited to talk to you.
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Thank you.
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So, kristin, tell us what NAFIA does.
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So NAFIA is a trade association and I mean our first mission is to educate people about pet insurance what it is and, probably more importantly, what it isn't, what people shouldn't expect and then what they should expect from it.
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And when I say educate people, I mean pet owners, but we also mean the veterinary profession, folks who work in the veterinary profession that aren't vets, but you run the practices and do a lot of the work behind the scenes.
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We speak to other organizations in the animal health community and we also try to work with regulators and legislators to explain to them what pet insurance is, because it's a little bit of a mixed breed of coverage.
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It's got the health piece, which is really important, because it's not life insurance, it's not liability insurance for pets.
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It really is about covering health care for your pet.
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But because the law sees pets as property, it also is property and casualty insurance, so it operates sort of between the two lines of those types of coverage.
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And that's interesting.
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But yet another thing I didn't know about pet insurance has it kind of always been that way, or has that been part of the evolution of pet insurance?
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Yeah, so when it was first launched in the US I think it was around the late 80s and it was a company called Veterinary Pet Insurance that later became nationwide the very first pet that was ever insured was actually Lassie, the television dog, and it has grown pretty steadily since then.
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But yes, it has always been.
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Pets were deemed as property under the law and so the coverage got treated that way from a regulatory perspective.
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Immediately and, as you could guess, because Lassie was in California and that's where the home office of that particular company was based that was the first state that started offering it, but it rolled out across the country very quickly and I think up until the pandemic our growth has been pretty steady as an industry.
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We've had new companies coming on, but it's really been the past three, four years that the big insurance companies that offer home and auto and other kinds of personal lines of coverage have taken an interest in the product and said, first of all, we want to add this to our lines of business because it makes sense, but also, very clearly, their customers love and care about pets and they recognize that it's sort of a companion product for a lot of the other coverage they offer.
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It makes good sense to have it in their bundle of coverage.
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When I was logging on because I have USAA insurance as a former military person and I could swear I saw the other day that they're offering pet insurance and I was very surprised by that.
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Yeah, when they first looked at it they approached the association and that's often what happens.
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So there's a couple of different ways that coverage is offered.
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So there are underwriters that sort of take the risk of the coverage, and you'll see that in almost any kind of coverage.
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There are brands that are specific to pet and then there are brands that have evolved out of other property and casualty lines.
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So that's where you start to see the big companies.
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And then there's sort of a white label type of coverage and it's no different from any other coverage.
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But what it is is that a brand will see like a USAA or maybe thinking like a financial company or another.
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Aspca is a good example of that, where they say, hey, this is something we want to be able to deliver to our members or our customers or our shareholders or our employees, and we're going to partner with a provider to deliver that and we're going to shape it under our brand and offer services and everything that fit our brand.
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And so it's sort of offered those different ways and they're all the same.
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It doesn't mean I'm not saying the coverage is exactly the same, but the quality of coverage, the dependability of the company, the way it's underwritten the way it's regulated.
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It's always the safe, secure and trusted.
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That's good to know.
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And when you're looking at such a wide variety of organizations that are offering the insurance and we're going to get to the issue of kind of picking through some of that and how to make decisions, because the decision is going to be different for each pet parent.
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But before we get into that, why would you say because I know what my answer would be but why do you think it's so important that pet parents have pet insurance these days?
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Yeah, I think the first thing is that since the pandemic, I think we have reached a pivotal state of the way we view our pets In the human health and in the animal health world.
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There's sort of these concepts of the relationship between us and pets and the benefits of that, and one of the things that you'll hear people refer to more and more is what they call the human-animal bond.
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There's actually an organization, a really good one out of Washington called Habri, that is doing some amazing work in that space and advocating for the value of that for people and their pets, so that I believe that bond we've been waiting for that to reach this sort of really unique state.
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And I think the pandemic was sort of that turning point for us as a society, where we were at home, we were living alongside our pets every day.
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We weren't leaving them and then coming back and spending a couple of hours with them at night and then going to bed.
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We were playing with them.
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They came with us out for walks.
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I know people who bought pets for their pet during that time.
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Me too, fluffy needs a friend, so we're going to get one, and I think it changed the way we see them and the way that we care for them and the way that we value them.
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And I think that is sort of that big turning point that we've seen and that is impacting the way we want to care for them.
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And we are pet families now.
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We are not pet owners, we're not pet parents so much as one person and a pet is still a family and that's how you view your pet and I think if you view your pet and value your pet that way, it's important for you to be able to go gee, not only can I feed my pet today, but can I care for them?
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If something happens and it does, it always does.
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Just like with people, pets get sick and their lives, unfortunately, are shorter and more concentrated.
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So those things happen in a decade versus over 50, 60, 70 years.
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So it's more concentrated in a pet.
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So I think if you love your pet, if you don't have insurance, you have to make sure that you have that financial ability to be proactive and take care of them the way you would take care of another family member.
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Yeah, I mean, that's so true and that's something that we face in our rescue and starlight outreach and rescue and lots of rescues is People wanting to.
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They're contacting us to give up their pets for economic reasons.
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You know they're moving, they can't afford this, they can't afford that.
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But probably the most sad situation is when I've got somebody that calls me in tears because their animal Got heartworm, their animal got out the front door and got hit by a car and they can't afford to pay the thousands of dollars for treatment, for whatever it might be, and so, because they want their animal to have a chance at life, they would rather give it up to us than to do.
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What a lot of pet parents are forced to do is to make Decision to euthanize a pet on a financial basis.
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You know the pet pet could be saved, but we're using this term a lot in nowadays Economic euthanasia.
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When you've got a situation where somebody is primarily euthanizing their pet For financial reasons, they just can't afford to pay to fix whatever is going on with their pet and it's tragic and sad when you've got somebody that loves their pet and is a good pet owner and it's just this one thing, it's the financial.
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That is just they can't swing it.
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You're right.
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Yeah, the Funny.
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You say that it.
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People are hearing that term now, but it's actually the reason that a veterinarian started the very first pet insurance company in the US.
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He was a vet.
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He saw that happen in his practice.
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He I think he tells the story of you know a family, a child, saying to him why do we have to do this?
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You know, and I've read numbers they probably have changed now but because of inflation and things like that.
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But they're saying that threshold is around $600 is the threshold where someone will consider euthanasia Because they can't afford to do it.
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And I have to think that there's got to be some impact on the veterinary practice as well, because people are surrendering pets they can't treat to them.
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These are people who, yes, they run a business in that, but they're also called to care for pets and they're having to Make those decisions themselves or take on the cost of treating pets.
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They're seriously ill, seriously injured, and then that reflects in the cost of care for all of us, right?
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Yeah, absolutely, and I work closely with my veterinarian who who helps us with the rescue, but also, you know, with with other veterinarians in the area and in in my regular work, and People don't realize what the veterinarians and the technicians go through when they're on the other side of that.
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You know, when they get accused, all you care about is money and it's like you know, I can't.
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People don't understand that if they Did everything for free, then they wouldn't be in business.
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I mean, it's like I can't help your pet if I'm not able to keep my business afloat and pay my employees.
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So you know another thing in this in this sort of economic environment you you were talking about, you know why the growth of Coverage and what's happened with pet insurance in recent years Inflation is an increasingly great concern for every family, for every household, and again, when I say families, that's a person and a pet to me.
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So I think that what I'm reading Veterinarians are facing incredible inflation and we we forget to think about that.
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So you know, does the cost of coverage go up?
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It goes up with the cost of care, and that cost of care is not about making money all the time.
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That is the cost of lab equipment.
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I read something.
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It's gone up like I don't know, 30, 40 percent.
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You're seeing, you know, 20, 30 year, 20 or 30 percent increases year over year, and then sometimes there's delays in the rates getting approved at the state level for pet insurance companies and then those Increases get compounded.
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So all of a sudden there's a big jump in the cost, right, but but if you think about it, that cost of coverage, those rate increases, are based on what that company Experienced from a claims perspective the year before.
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They're not making those numbers up out of the blue and they can't raise rates Without going to the states and making a case, state by state, for why the cost is what it is, and that base is based on the market.
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It's based on veterinary costs, it's based on the cost of actually providing the insurance to people and what people are actually claiming for.
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In that previous year.
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Yeah, yeah, that's gotta be obviously a huge piece of it.
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And you know, it reminds me when you talk about inflation and you had mentioned earlier that the threshold for a lot of people To not be able to afford care is $600.
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And now, granted, as a rescue person, my vet bills are thousands of dollars a month, but $600 is not a lot in the grand scheme of things.
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I mean, that's an.
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That's probably an exam for x-rays, some medication, you know, maybe some type of minor procedure.
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It's not major orthopedic surgery, or my dog got hit by a car kind of thing, or my dog has cancer and needs chemotherapy.
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That's a visit to the vet for yeah, you know, in many instances when we talk about and whenever I hear people talk about insurance, they always think of sort of catastrophic Accidents.
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But I think that illness is a much greater Concern.
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The costs are greater because they happen very quickly and they escalate.
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So, you know, you take your pet in for something that seems minor, they do the basic things.
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A couple of days later they're not getting better, they do a little more and they do it based on the economy of that too right, they start with the things that they think are less serious and they hope that that's what they are.
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But they go up and I think we're also starting to see that the reason that these great big vet bills are coming in is that people have delayed taking their pet to the vet in the first place because of financial reasons or Because we just don't want to see those things and we don't want to have to pay them so and we don't want the pet to be sick.
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So we're kind of dealing with a little bit of denial and we put them off, and we put them off and then, you know, the vet recommends some things to us and we only do some of them Because that felt a little expensive, or we didn't want to have to pay for those pills, or the dog didn't like them, so we didn't.
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We make sure that they took them, and then it gets worse, and it gets worse, and then it's compounded, right?
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So you end up with a very serious illness and, yes, a great big bill that probably could have been prevented had we Been more proactive at the beginning.
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Okay, you know from working in a practice, you also know that pets love us and they want to protect us and they mask a lot of the things that they're feeling and Experiencing until they can't anymore.
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So you know, they go and hide or they wag their tail and you think, oh, they're fine, right.
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And then all of a sudden, bang, they're not, and right, serious, and you have to take them in.
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Yeah, kind of seemingly sneaks up on you, but in reality it's been there for a while.
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I don't have an insurance on one of mine either, and because it wasn't my decision, we I met my now husband.
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His pet wasn't insured.
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He didn't even know pet insurance existed.
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So I have the comparison of two pets, one of which is getting very old and of course those things are starting to happen all the time and he's always surprised oh, it's a thousand dollars.
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Oh, but you know you pay those things out for other things in your life and this is the pet you love.
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So I always find it really interesting how people kind of straddle those love and financial decisions.
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And you wouldn't make those decisions around another family member that way and you know we need to not make those decisions around our pets that way.
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We need to make their emotional decisions and they're challenging and you're straddling the financial and the economical impact on your home and your life.
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And pet insurance is a proactive tool.
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It's not a reactive tool.
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It's not like credit right where you sure there's lots of credit out there for everyone there's doesn't need to be pet credit.
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It can be any kind of credit.
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But we live month to month.
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We are not a nation of savers, so we live month to month.
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If we make a lot of money.
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We have that money planned every month.
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It's accounted for, it's going towards our kids university, it's going towards, you know, fixing our roof or our next vacation or our braces, or you know those things.
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Our mortgage, our car payments.
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Those are the basics.
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But when something happens, you need the safety net and knowing you have that coverage empowers you to make different decisions, make them quicker, be more proactive about how you're going to treat your pet.
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It gives you that confidence that you can do those things and I think that's a big reason why people should think about getting it and get it when their pet's young, before the cost has gone up, because your pet already has pre-existing conditions and, just like us, as we age, we have increasing risk of getting ill and having major illnesses and having accidents.
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So yeah, and we pay accordingly.
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It's more expensive.
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So it's the same, like you say, with our pets.
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You wait until something's wrong and either A it might not be covered at all or it's going to cost you, and that actually you know when you said something about you know not taking our pets in because we don't want to, we don't want to pay the $50, $100 for this or that, and so we just kind of avoid it.
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I have found that the people that I know that have pet insurance do the routine, the annuals that they're supposed to be doing to, you know, head things off at the past for lack of a better term or to maintain their pet's health, instead of trying to fix their pet's health, because that's one of the benefits of having that pet insurance is that that routine stuff is covered in some form or fashion.
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Yeah, in some cases it's covered, in some cases it's not.
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But what it also does is it means that you don't have some big catastrophic bill that prevents you from doing the preventive things right.
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So there is wellness available for in a lot of forms.
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There is a pet insurance version of wellness.
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Many companies are offering that now and then, as you know, there are other wellness programs.
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For me, wellness means I'm doing the expected things right, I'm being proactive about spay or neuter, I'm doing flea and tick, I'm doing my vaccinations every year and those types of things, and I'm planning out those costs.
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I'm sort of amortizing those costs so that I don't get hit with them all at one time.
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And then the actual pet health insurance piece is for the unexpected, which is always surprising to me, because of course they're going to get sick, of course there's going to be injuries and accidents.
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It's a life.
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And if they don't, you're really lucky, right, but be prepared for not being lucky.
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And then if you have paid out that, it doesn't matter about the return on investment, it's the peace of mind and you don't have to worry about it, right?
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And that is another piece that so many people come to me and say is it worth it?
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And they do the calculations Well, I don't not ensure my house, right.
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I don't not ensure my car and then go at the end of it.
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I didn't have an accident or my house didn't burn down, so was it worth it?
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Did I get my return on investment?
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This is your pet.
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Stop thinking about it like that.
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It's insurance.
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It's not an investment.
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It is a proactive financial tool that is about mitigating risk and your pet it's protecting their health and it's making sure that you can provide for that throughout their life.
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Yeah, definitely so is pet insurance.
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Is it the same across the country, like if I go with a certain company, let's say, and I live in Maine, is it going to cover the same things as it does in Texas or California, or does it?
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You mentioned before that it sounds like a lot of things are regulated and go through the state.
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Yeah, so it's not like some forms of mandatory coverage where it has to be the same everywhere and in in reality, no insurance is the same in every state because insurance law and consumer law and other types of laws vary from state to state.
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But there is a movement in the pet insurance world right now.
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It's called a model law that was passed by the National Association of Insurance Commissioners two years ago and that model law is rolling out across the country so that states do adopt a law for pet insurance and it can be more unified across all the states.
00:22:31.326 --> 00:22:35.099
So, that said, every state has their flavor, right.
00:22:35.099 --> 00:22:39.134
Some states, for example, there's consumer protections like free look.
00:22:39.154 --> 00:22:40.940
In California it's 30 days.
00:22:40.940 --> 00:22:47.978
Some states might say we want it to be 15, some might make it shorter, some might not believe in a free look.
00:22:47.978 --> 00:22:59.661
So free look is basically your, your ability to return the coverage if you haven't used it in that first 30 days and have a chance to change your mind or get different coverage or or whatever.
00:22:59.661 --> 00:23:23.727
But so those types of things can change and but typically a company designs their coverage and then they file that coverage in each state with certain rates and that gets approved by the Department of Insurance in that state and then that's what they sell it for, and it's mostly sold online and virtually so in a customer center.
00:23:23.727 --> 00:23:27.221
So people are talking to the company.
00:23:27.221 --> 00:23:42.212
It feels the same doesn't matter where they are, and if they happen to move from one state to another, that may slightly change the policy in the next year when it renews, but for the most part you're going to experience the same coverage across the country.
00:23:42.694 --> 00:23:51.282
Yeah, and the, the categories or the things that are covered, because you had mentioned the idea of there's the health piece and then there's the, the wellness piece.
00:23:51.282 --> 00:23:56.144
Yeah, what are some of those buckets that people might want to be aware of?
00:23:56.144 --> 00:24:13.346
As as to, you know, not necessarily choosing a particular company, but when I'm trying to make a decision as to, okay, I know my pet, I know this situation, I know how I want my pet to be cared for, I know what support or help I might need from an insurance, what, what are the buckets that I might be looking at?
00:24:14.209 --> 00:24:16.497
so I mean the two big types of coverage.
00:24:16.497 --> 00:24:21.992
The main coverage is accident and illness combined and accident only.
00:24:21.992 --> 00:24:32.310
And you know, when I first got into pet insurance someone pet insurance first got into the marketplace, everyone thought of accidents because when we were growing up we lost our pets to accidents.
00:24:32.310 --> 00:24:36.628
We didn't know they had illnesses, because they weren't being diagnosed and things like that.
00:24:36.628 --> 00:24:43.307
So you know, we always thought about, oh, my pet got hit by a car or like an accident would take a pet right.
00:24:43.307 --> 00:25:05.487
But illness is far more likely and because pets are living longer, because veterinary care is following human care in terms of the sophistication and what they can do for your pets, and we want our pets to live longer, healthier lives, so I think that's like something like 98 or 99% of coverage now is accident and illness combined.
00:25:05.487 --> 00:25:11.064
So there's some other things that people should think about you mentioned, you know, I know my pet.
00:25:11.064 --> 00:25:19.509
But every breed you know, whether your dog is large or small, whether it's a mixed breed or not, is prone to certain conditions.
00:25:19.509 --> 00:25:28.259
You can talk to your vet practice and say you know what are some of the conditions that are likely for my pet that I should be watching for, and a lot of.
00:25:28.259 --> 00:25:31.307
That is a good thing to do in a first visit with your practice.
00:25:31.307 --> 00:25:34.946
Ask them and what are the costs to care for those type of things?
00:25:34.946 --> 00:25:39.682
And then the next piece is to say what am I likely to need?
00:25:40.364 --> 00:25:43.413
You know, for some people it's, as I said, month to month.
00:25:43.413 --> 00:25:56.992
They don't necessarily have a super fixed income or they have funds that they can pull from other things that are discretionary, whereas other people have such a tight budget they don't have that flexibility and so they they need a different kind of coverage.
00:25:56.992 --> 00:26:01.727
There are a couple of different ways that benefits are paid out.
00:26:01.727 --> 00:26:04.063
So sometimes it's a great big bucket.
00:26:04.063 --> 00:26:17.163
If you're looking at the companies, it's a lifetime coverage, or maybe $100,000 for your pet's life, and you have this big bucket to draw from no matter what, and of course that would be more expensive because it's really comprehensive and it's a large amount.
00:26:17.163 --> 00:26:21.917
Others is you have what are called per condition limits and those are.
00:26:21.917 --> 00:26:33.266
So if they have diabetes, you have $2,000 or $5,000 and you have that pocket or an envelope, almost that you can draw on until that is used up.
00:26:33.266 --> 00:26:37.506
And then there are renewable limits where they renew each year.
00:26:37.694 --> 00:26:45.343
So, for example, my dog, I have coverage, that is, I think it's $5,000 per condition and those condition amounts renew every year.
00:26:45.343 --> 00:26:48.143
And that's because I have a large standard poodle.
00:26:48.143 --> 00:26:52.742
I talked to my vet and said what are some of the things that can happen to that dog?
00:26:52.742 --> 00:26:57.439
And when they do happen, they're big, they're fast and they're expensive.
00:26:57.439 --> 00:26:58.740
Right, he had an ear condition.
00:26:58.740 --> 00:27:04.461
I think it cost me like ear infection cost me like $3,000 in the first couple of years of his life.
00:27:04.461 --> 00:27:06.481
It took almost a year to get rid of it.
00:27:06.481 --> 00:27:07.424
He's fine.
00:27:07.424 --> 00:27:08.579
He has nothing else now.
00:27:08.579 --> 00:27:16.138
But thank goodness I had that coverage, because who has three grand on a month-to-month basis to pay for that?
00:27:16.575 --> 00:27:23.641
And it was just a recurring amount of him trying different things and taking him back and then other things popping up because of that condition.
00:27:23.641 --> 00:27:26.419
So for me it was.
00:27:26.419 --> 00:27:29.125
I wanted renewable coverage every year.
00:27:29.125 --> 00:27:33.402
It kind of is like a reset and I knew I needed a larger amount.
00:27:33.556 --> 00:27:45.382
If you have a small dog, you talk to your vet and they say you know what, not as expensive to treat, not as you know, if we have to put your pet under for surgery, we don't have to use as much anesthesia.
00:27:46.035 --> 00:27:49.400
The medicine is cheaper, it's smaller, they take less of it.
00:27:49.400 --> 00:27:54.780
So those types of things are also considerations, right, and they tend to live longer.
00:27:54.780 --> 00:28:07.722
So you get it early and you get something that you can keep over their whole lifetime, whereas the larger breed dogs tend to not live as long and those kinds of costs come earlier and those are sad realities.
00:28:07.722 --> 00:28:44.866
But as a pet owner, when you pick a pet and you love a breed and or you have a mixed breed and you know that it has sort of the it might be a Labradoodle, it might be a Terrier, poodlecross or something it's likely to have some of the predispositions of both of the breeds that you're getting in that mix, right, if you know that I think almost every rescue dog has some Husky and some Lab Right, pretty true, and so those conditions are likely, you know, knees, hips, those types of things Hot spots, big dogs in general too.
00:28:45.035 --> 00:28:50.183
I mean it's just, you know, the bigger the dog, the more likely some of those issues can be.
00:28:50.183 --> 00:29:05.817
And I think it's so important that you mention you know, because there's two pieces to what you said that I want to make sure everybody really heard is number one, you know, to have those conversations with your veterinarian and to really dig in and the whole team, yeah, yeah.
00:29:05.817 --> 00:29:08.942
And it is so important to do it early.
00:29:08.942 --> 00:29:24.300
No, not only because I'm assuming and you can tell me I get a new puppy or I get a new dog or whatever the case may be that I get the insurance right away, versus waiting until I start realizing, oh, this dog's cost me a lot of money because it's got a lot of problems with this or that.
00:29:24.300 --> 00:29:26.442
Why is it so important to do that early?
00:29:26.442 --> 00:29:30.759
It's like I know that it's got to be the cost for one thing, but is it the coverage as well?
00:29:31.423 --> 00:29:31.623
Yeah.
00:29:31.623 --> 00:29:38.044
So when coverage is underwritten, when you're enrolled, a pet insurance company takes three to four things.
00:29:38.044 --> 00:29:40.583
There's three things, but they're like technically four.
00:29:40.583 --> 00:29:42.942
First of all, is it a dog or a cat?
00:29:42.942 --> 00:29:44.441
So that's sort of the obvious one.
00:29:44.441 --> 00:29:47.383
And then the next is what is the breed?
00:29:47.383 --> 00:29:56.423
Right, and they know from their own insurance claims over many years what the risk of a particular breed is.
