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The PupJoy Post

Should You Get Health Insurance for Your Dog?

You love your furry family members. You take care of them like a child! And in return, they shower you with with unconditional love, goofy antics, and sweet cuddles. It’s so rewarding…

Until you get socked with a $4500 emergency vet bill.

You’re obviously going to pay it. But the continuing rise in pet health care costs brings up a new question — should you get health insurance for your dog?

In a recent M.I.T. study, economists looked for similarities between human health care and pet health care. They found a sharp increase in overall health care spending in both markets from 1996 to 2012. Higher income households spent more on both types of health care, and end-of-life care racked up the highest spending for both people and pets.

When it comes to the emotion-driven reasons behind health care spending, human health care and pet health care track pretty similarly. Makes sense, right?

The biggest differentiating factor when it comes to pet health care is insurance — or really, the lack thereof.

Some economists have argued that human health insurance and government intervention promote unnecessary spending. But pet health care spending habits tell a different story.

Less than 1% of American dogs and cats are insured, and we’re spending money on them anyway.

So. Since we’re shelling out the big bucks no matter what (when it comes to our pets, anyway), insurance seems to make sense.

And don’t discount the importance of emotion. Your regular office visits, vaccines, and routine checkups might run you $1,000 a year, doled out little by little. You can budget for that pretty easily.

But all of a sudden, your little angel gets in a nasty fight, or gets hit by a car, or you find out he has cancer!

The emotional stress of these unexpected and harrowing situations does not lend itself to rational decision-making. You’ll basically do whatever it takes to save your buddy’s life, and worry about the bills later.

But those bills are nothing to sneeze at. A dog’s kidney transplant costs $25,000, just for one example. And we’re often asked to make these kinds of decisions toward the end of a pet’s life, when we have to weigh the exorbitant cost of treatment against their overall quality of life (or even just their life expectancy).

Anyone who’s been in that situation can tell you — it’s the absolute worst.

Pet health insurance exists to protect you against these unexpected large payments. Just like human health insurance, you pay a monthly premium starting around $22/month. There’s deductibles and copays, and certain procedures and conditions aren’t covered.

is a fairly new product — fun fact: the first pet to ever have health insurance was Lassie — and as such, it’s less complex than its human counterpart.

But like all insurance, it’s a gamble. Over your dog’s lifetime, you’ll most likely end up spending more on premiums than you’ll earn back in coverage. Consumer Reports did some number crunching comparing the net gain or loss across three different health care plans, and their conclusion was that in most cases, it’s not worth it.

But what if…?

Sure, it’s annoying to pay monthly premiums for something you never have to use, but what if?

In many cases it’s easier to swallow a $25 monthly premium than a one-time bill of $15,000, even if your lifetime cost adds up to way more than that.

Here’s a great breakdown of the most popular pet health insurance plans.

If you can afford it, “self-insuring” is an option — that's when you save a fixed amount of money each month specifically for large pet-related bills. If you put away $150 a month, you’ll have a kidney transplant in ten years!

And if you don’t need a kidney transplant in ten years, well, you’ll still have $25,000. You don’t get those kinds of odds from insurance premiums.

But if something happens to your pet in his first few years of life — before you've had time to save up the big bucks — your self-insurance plan is worthless.

So, we're back to the gamble. Pay premiums you may never need to use? Or take your chances and hope for a healthy dog?

Which would you choose?