<p>I think that the problem is that many people are confused over the purpose of insurance – and this is particularly true of the health insurance system for people-- with the system itself based on a confusing premise. </p>
<p>There are two kinds of health care needs. One is for routine preventive care, the other is for unanticipated expenses arising from serious illness or accident. Somewhere in between there are also ongoing costs for treatment of chronic health conditions, which may or many not be costly depending on the condition being treated. </p>
<p>Most people lump all of that together and I think that leads to the accounting problem: they want the dollars they pay for health care premiums to match up with the dollars that they pay for health care services over time.</p>
<p>But most middle income families don’t particularly need insurance for the routine stuff – any more than you would need to buy insurance to pay for routine car maintenance. In that respect, banking the money would be a better option. That is in fact what I do, because I happen to have a health savings/catastrophic health plan. </p>
<p>But the reason insurance is necessary is for the big, unanticipated, catastrophic stuff. And that is not something that should be evaluated in terms of “did I get my money’s worth” because by definition, you “win” when the events that you are insuring against never happen. For example, I certainly have never gotten much value of my homeowners insurance, and I have no intention of setting my house on fire in order to get my money’s worth on 20+ years of insurance premiums. </p>
<p>So the real question is how much risk are you willing to take, and what are you willing to pay for someone else to bear that risk instead? For pets it gets complicated because we don’t value pet life in the same way that we value human life. So there are many people who would simply feel that $1500 is too much to spend on an ill or injured pet, and when faced with that cost they will opt to put the animal down. I’m sure that is a very common situation in vet’s offices all of the time – again and again they must face the sad prospect of euthenizing an animal who could be treated, but at a high cost. </p>
<p>I personally don’t want to be in the position of having to make that choice. It was hard enough with my last dog to figure out the point at which it became a kindness to end the elderly dog’s suffering. I don’t want worry about $$ thrown into the mix. </p>
<p>One reason I have pet insurance now when I didn’t have it in the past is that I am financially in a somewhat stronger position. Because I have more money, it is not in any way a hardship for me to come up with less then $600 annually to insure two young dogs. That is far less than the cost I pay each year for boarding fees when I travel – and in fact, for me, the fact that I travel sporadically and board the dogs is one more reason to keep them insured. I know I can tell the dog caretaker that any vet fees are fully authorized and will be paid for, thus taking the burden off of her as well as myself. </p>
<p>I don’t know or care if I will break even financially, because part of what I am buying with insurance is peace of mind, and I can’t really put a price on that. Just like it is hard for me to know how much to value the lives of two mongrels who were picked up as strays before they came to me. I just know that one thing I don’t have to worry about right now in my life is high vet fees. Since I have plenty of other things to worry about, I’m glad that this happens to be one of those risks I can insure against at moderate cost.</p>