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It’s National Pet Health Insurance Month—Is Your Pet Covered?

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I found myself ruminating on the topic of humanization of our pets at about the same time as I was sorting through a pile of EOBs (explanation of benefits) from my health insurance company. And I wondered: Have therapeutic pet food and supplements made headway when it comes to being covered by insurance? Bring on Google. Imagine my surprise when I discovered that September happens to be National Pet Health Insurance Month.

So what does the pet insurance market look like? There are 11 national, North American and state-based insurance carriers for pet health. According to the North American Pet Health Insurance Association (NAPHIA), it’s a $100 million industry insuring more than one million pets. That translates into roughly 876,000 insured dogs and 150,000 insured cats. Purchasing pet insurance is not dissimilar to buying individual insurance, without some of the newer reforms. Age, breed and geography dictate premiums; pre-existing conditions can be excluded from coverage. There are wait periods for eligibility (both for an accident and for illness). Reimbursement varies dramatically, and coverage limits often apply. And of course, you must utilize network providers.

Benefit coverage is even more impressive. Of the seven major carriers I reviewed, all but one cover alternative health. That can include acupuncture, chiropractic, homoeopathy, hydrotherapy and sometimes even Reiki. You won’t find this in many individual plans. It should be noted, and the programs require these services to be delivered by a DVM or provided under the supervision of a DVM.

Supplement and herb coverage mirrored human plans much more carefully—they aren’t covered, except for one plan that will include supplements prescribed by a veterinarian. Coverage for therapeutic diets for cats and dogs also mirrored the human benefit package. No diet programs for pet parents? Same for the four-legged family members. Again, only one of the seven plans will reimburse for a prescription diet. Why does this matter?

While the market may seem relatively small for pet insurance, the demand for therapeutic diets and supplements is not. According to Packaged Facts, 36 percent of supplement and nutraceutical treats are sold in veterinarian offices. And in my experience, almost every veterinarian sells specialized therapeutic diets for cats and dogs. Food for weight loss, special kidney diets and nutrient-enriched foods for pets undergoing cancer treatment line the shelves of my doctor’s storeroom—surprising given the lack of nutrition training afforded most vet students (again, a mirror to the human side). I suspect the 2012 release of FDA’s Center for Veterinary Medicine Draft Guidance on products “intended for use to diagnose, cure, mitigate, treat or prevent disease in dogs and cats” has impacted DVM sales of therapeutic pet food. Thus, the result of the agency’s expressed desire to keep products with these claims off the shelves of stores and the Internet and prescribed by licensed veterinarians.

What would happen if insurers decided to reimburse for supplements and special diet foods, most likely via prescription? There is certainly ample room for growth in this channel, and I’m guessing sales of therapeutic diets and supplements would go up. Trupanion, the one insurance company, is undoubtedly banking on many more pet parents buying health insurance for this coverage. Tangentially, imagine the potential for transformation of a disease-based health care model to a wellness model for cats and dogs. Pet parents have demonstrated with their wallets a desire to keep their pets healthy and happy through food and nutrition. It might be far easier to make a financial case for insurance coverage on these products than it has been for human coverage.

It’s an exciting element in the broader discussion of distribution channels and the challenges that come with DVM sales. Veterinarians want more outcomes data on the effectiveness of the products; they need to understand safety issues associated with supplements and overall are less familiar with the concept of nutrition as medicine. Consumer education contains its challenges as well. Sixty-one percent of consumers, according to Packaged Facts, believe pet food itself provides all the nutrition required to keep their pets healthy. Regardless, whether a pill is dipped in peanut butter, supplementation is pored over the menu and into the water, or food is fortified with milligrams of health-fueling ingredients, vets will continue to play a leadership role in the growth of the industry. And, pet insurance companies could prove a valuable ally.

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