Most pet owners have stories of nightmarish vet bills, and I’m no exception. When I adopted Bailey, a 4-year-old beagle mix, three years ago, I thought the costs would be minimal. Surely food and a few shots a year wouldn’t add up to that much. The adoption cost $50, which included vaccinations, heartworm testing and medication for parasites. The dog license was a reasonable $10.
SEE ALSO: 7 Ways to Save on Pet Costs
At the first wellness appointment, the vet recommended a dental cleaning, to the tune of $350. Little illnesses -- bronchitis, tonsillitis, rhinitis -- brought us in regularly the first year, adding to the tab. Flea and heartworm medication, plus the annual vaccines at the end of the year, brought the health care tally to $1,490.
Then this spring, Bailey suffered multiple seizures that the vet couldn't explain. Although seizures are common in dogs, Bailey's age (now 7), combined with a lack of previous history, suggested a possible brain tumor. My vet recommended a visit to the neurologist (yep, they have those for dogs) to find out more. After a day of waiting, an MRI, a spinal tap and more waiting, Bailey's diagnosis came back: idiopathic epilepsy. Basically, he has seizures that may be hereditary. The vet prescribed anti-seizure medication.
It was the best possible outcome, but my wallet took a serious hit. The first vet visit, to do a blood-and-urine workup, was $187. The consultation at the neurologist's office was $275, and the testing was $2,485. Medication for a month was $83, bringing the total to $3,030. In the three years I've had Bailey, I've shelled out $5,956 for vet visits and medicine.
I have health insurance, which has helped defray some of the cost. Pet insurance has deductibles, payout limits and exclusions; the first two years I had Bailey, the premiums and the payouts were pretty much a wash. But this year, the payouts have exceeded my premium by hundreds of dollars.
A safety net (sort of)
Last year, pet owners in the U.S. spent nearly $51 billion on their pets, according to the American Pet Products Association. That amount has increased 73% in the past ten years and exceeds what we spend annually on child care. Veterinary care accounted for $13.4 billion of the total.
Twenty years ago, if a pet was seriously ill, treatment options were limited. Today, many of the options available to humans -- transplants, cancer treatments and so on -- are also available for pets. For a lot of owners, pets are part of the family, and owners will spend whatever it takes to keep them healthy. But your philosophy about your pet -- and your financial resources -- will dictate how far into your wallet you're willing to dip if your pet gets sick or has a mishap.
Rather than choose between their pet's well-being and their wallet, owners are springing for pet insurance in growing numbers. As with any insurance, you must weigh deductibles and coverage against the possible payout. Unfortunately, unless your pet comes down with a serious illness or has an accident requiring extensive veterinary care, it's unlikely you'll recoup much more than the premiums you pay for a policy. "The big benefit of pet insurance is peace of mind," says Karen Felsted, a veterinarian and CPA who owns a veterinary consulting firm. "If something goes really wrong, you'll at least have some of it covered."
If you think buying pet insurance might be right for you, do plenty of research. Until 1997, the only company offering pet insurance was VPI, and it has the largest share of the market. But competition has been growing over the past five years, and now 11 companies offer coverage. Most of them do business under more than one brand. Older pets -- those past 7 to 10 years old -- may not be eligible for a new policy, so getting a policy early on is the way to go. When you renew, you may be hit with higher premiums.
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What the plans cover
The higher the maximum payouts, the pricier the premiums. Many pet insurers offer a wellness plan as a rider to a policy that covers injury and illness. Wellness plans cover routine care, such as physical exams, flea-and-tick and heartworm medications, vaccinations, and regular testing. You'll be reimbursed based on a schedule -- say, $20 to $50 for a physical exam.
When you're shopping policies, the first thing to look at is how a company pays out claims. VPI, for example, reimburses according to a set schedule of benefits. That means that for each diagnosis there's a ceiling on the amount you can be reimbursed, and the plan pays 90% of the allowed amount. In return, premiums are fairly inexpensive. (As when you use your own health insurance out of network, you pay the vet directly and submit your bill for reimbursement.) Many of the newer companies pay a percentage of your vet bill, up to 90%.
Be sure you understand the deductibles and maximums. Deductibles can be annual, per visit or per incident (say, if Fluffy gets hit by a car and requires multiple vet visits). Plans may have annual maximums that limit the payout per year, or they may have per-incident maximums that limit how much they'll pay for a specific incident. My insurance for Bailey through VPI, for example, paid a total of $718 for his seizure treatments as they reached various limits for diagnosis and testing. For older pets and pets with higher-risk lifestyles -- cats that live outdoors or dogs that are allowed to roam, for example -- look for policies with higher maximums because it's more likely those pets will have higher expenses.
Preexisting conditions are never covered, says Michael Hemstreet, editor of PetInsuranceReview.com (opens in new tab). Hereditary disorders -- -such as hip dysplasia in golden retrievers and kidney disease in Persian cats -- -are generally not covered, either. Some plans are starting to offer coverage for hereditary conditions, but those plans are more expensive. Ask how the insurer handles chronic conditions, such as epilepsy in dogs and asthma in cats. Those issues will likely require numerous vet visits.
If you give accident and illness policies the thumbs down, you can still purchase a wellness plan to cover routine care. "That's the single most important way to save money," says Dr. Louise Murray, vice-president of the ASPCA's Bergh Memorial Animal Hospital. If you're committed to preventive care, you'll likely get back what you paid and sometimes more.
-- Other initial medical includes deworming, basic blood tests and microchip.
-- Aquarium equipment includes basic 20-gallon setup with light/hood, outside filter, undergravel filters, air pump and gravel.
-- Food is premium-brand dry kibble.
-- Recurring medical includes exam, vaccinations, heartworm preventative and topical flea-and-tick preventative.
Source: ASPCA[page break]Page 3 of 3
Independent animal hospitals are starting to offer wellness plans, as are chains and other groups. Banfield Hospitals (opens in new tab), a national chain associated with PetSmart, offers plans ranging from $22 to $32 per month for an adult dog and $18 to $23 for an adult cat (they have separate plans for puppies and kittens). There are several choices, but each covers the entire cost of comprehensive physical exams, vaccinations, diagnostic testing, fecal exams and deworming. More-expensive services, such as spaying and neutering for puppies and kittens and dental cleaning for older pets, are offered on higher-tier plans. There's a one-time enrollment fee of $35 to $50, but you also get a discount ranging from 5% to 20% on other Banfield products and services.
Pet Assure (opens in new tab) offers a discount program at participating veterinary practices. For $99 per year for a dog and $79 per year for a cat, you receive a 25% discount on all medical services and up to 50% off pet products and services from the merchant network. Family plans, which are available for up to four pets of any kind, cost $149 annually.
United Pet Care (opens in new tab) covers sick and well care at participating vets for as little as $11 per month for one pet. Depending on the plan you choose, you may get a percentage discount, such as 20% off an annual exam, or a discounted fee, such as $25 for an office visit. Plans are available in Arizona, California, Colorado, Nevada, Texas and Washington.
If you don't want to prepay, CareCredit (opens in new tab) is a credit card you can use at participating vet practices. It offers special financing and payment options. With a bill of $1,000 or more, you can extend payment to 24, 36 or 48 months, and you can stretch payment for a bill of $2,500 or more to as long as 60 months.
Adopt a mutt?
Mixed breeds tend to be healthier than purebred pets, so "you can save money out of the gate," says Kristen Levine, coauthor of Pampered Pets on a Budget. You'll pay hundreds or thousands of dollars to purchase purebreds, and they're more likely to have hereditary conditions. Levine recommends adoption as another way to save. Fees range from $30 to $150, and typically the animals will already be spayed or neutered and have the initial vaccinations and often a microchip to help you locate them should they get lost. Also, many vets will do a free wellness exam for adopted pets. Before you decide what kind of pet to get, do some research, preferably with a local vet, to see what kinds of routine costs you can expect and how much treatment for typical illnesses can be.
Having a vet you trust is important. Some practices tend to recommend the gold standard of care without always pointing out your options. Laura Deckelman, a photographer from Far Rockaway, N.Y., has owned nearly a dozen cats and says her vet values their relationship so much that he gave her a deal on a wellness checkup, vaccinations and spaying for her newly adopted cat, Silver. When Silver pulled her stitches out, bit off her bandage and needed more medication, the vet didn't charge for the follow-up visits. To find a vet, ask friends for referrals or post a question on your local Listserv. You can also check Angie's List (opens in new tab), although it costs about $14 to join for a month.
This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine (opens in new tab). It might be the best investment you ever make.