The North American Insurance Association, better known as the NAIC, has been having a bit of trouble lately. A recent article in the Wall Street Journal questioned whether the association’s mission was to improve the quality of health care provided to pets. The association contends that its primary goal is to improve the nation’s health care for all animals. However, both sides have their points and a resolution could be on the way soon. Let’s take a look at the background of this organization and see how NAIC might respond to pressure.
The National Association of Insurance Commissioners is the governing body that sets standards for insurance industry stakeholders such as individual agents and broker-relations firms. The group does not work on health care reform. The group does, however, recommend that the U.S. Department of Health and Human Services conduct studies regarding the impact of a health care model law similar to the one in Canada.
The Canadian government introduced a similar law last year. It restricts insurance companies from denying or limiting the amount of coverage to animals. According to the Canadian Animal Industry Association, an estimated 20 percent of Canadian dog owners do not have pet insurance. The association claims that owners who do have pet insurance are pleased with the coverage limits because it covers preventative services such as spaying/neutering, immunizations, and annual exams. The Canadian government estimates that the new laws will decrease annual insurance claims related to illness and injuries of pets by up to fifty percent.
The Canadian association also argues that the policy encourages responsible pet ownership. Pets are considered part of the family and owners are expected to provide for their pets in ways other than through insurance. In addition, the government regulates animal breeding and says that all animals must be kept up to industry standards. Additionally, the association notes that it maintains consistency in animal classification. For example, horses are classified as animals of leisure and aren’t used for racing.
According to the Canadian Pet Insurance Database, an estimated fourteen million pets in Canada are covered by insurance policies offered by the association. Most of the policies, however, only cover chronic and hereditary diseases and most treatments are optional. The Canadian Pet Insurance Database doesn’t track policyholders’ out-of-pocket costs, but says that the overall cost of caring for animals is likely far higher than the premiums required to cover them.
Some animal lovers in Canada worry that the move by NAIC will create a race to the lowest price. According to the Canadian Pet Insurance Database, pet insurance companies aren’t allowed to give discounts to low-income families. However, the database notes that animal hospitals in Canada are increasingly becoming more efficient. As more animals are diagnosed with conditions that would have been left untreated in the past, the need for in veterinary care is on the rise. The Canadian Pet Insurance Database says that in the last decade, out-of-hospital treatment for animals has more than quintupled, making it necessary for insurance companies to offer better discounts.
Dr. Richard F. Spark, associate professor at the Michigan State University College of Veterinary Medicine and one of the founders of the American Animal Hospital Association, tells the Canadian Pet Insurance Database that the association’s new rules concerning veterinarians treating pets out of state are designed to curb abuses and ensure that only highly trained professionals handle animals coming into their offices. “This will ensure that the animal is treated safely and efficiently,” he says. Spark also tells the website that the association hopes the new policy guidelines will encourage more veterinarians to take care of pets out of their own homes.
According to the Canadian Pet Insurance Database, the association isn’t done with pet policies just yet. The association hopes to get its pet insurance plan through state legislative committees by next year. Once it passes through the state House and Senate, it will then go on to the executive branch for approval. Spark told the Canadian Pet Insurance Database that the association will continue to do research and advocate for better animal health care standards across the United States. “We see this as a huge step forward in improving the nation’s image,” he said.