.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear S.R.:

I can’t comment on VPI Pet Insurance Inc. It’s not a public company, and the data I need to research the company is not readily available. But VPI operates like many human health plans. You take your pet to any veterinarian and pay for the treatment. The vet submits your claim to VPI with receipts for reimbursement. Then many weeks or months after you pay a $50 deductible, VPI reimburses you for 90 percent of your pet plan’s allowable benefits. “Allowable” benefits less the co-pay – that’s the rub! If a procedure costs $100, and the allowable is $70, VPI will pay you $18. Here’s the math: subtract the $50 co-pay from $70, and the insurer gives you 90 percent of the remaining $20, or $18. Well … Yipsedoodle, Andy!

I recall some 55-plus years ago I was really knee-walking, stool-hugging sick and could barely get out of bed to brush my teeth. My mom called the family doctor, and a couple of hours later he was at my bedside with his black bag. After his ministrations, a shot in the butt and two envelopes of pills, Mom gave him $10, and in two days I was 98 percent better and returned to tormenting my sister. Three years later, it happened again, but this time Mom gave the doctor $13 and remarked at the 30 percent increase in the cost. I remember the doc telling Mom that higher costs accounted for $1 of the increase, and I’ll always remember his last comment: “The other $2 pays for a new girl to fill out, manage and collect my growing number of insurance claims.”

I know nothing good or bad about VPI, but I know that MetLife is an insurance company with a conscience. MetLife offers pet insurance plans with typical premiums running $15 a month for cats and $20 a month for dogs. (Wow, I remember that first employer-sponsored human health policy in 1962 cost me $16 a month.) Today, about 10 percent of employers provide group pet insurance in their benefits packages. These policies cover almost all veterinary care from broken bones to upset tummies to vaccinations and cancer treatments

As pet health insurance gains greater acceptance and market penetration, your vet bills will increase accordingly. Pet policies pay discounted rates for procedures, and that reduces your vet’s income. But you need to know how these insidious insurers are responsible for higher costs. As more pet policies are sold, MetLife and other insurers will gain pricing power over your vet’s procedures.

So in a few years MetLife and others will begin to reduce procedure reimbursements by 5 percent each year, so your co-pay inches up by that amount or your annual premiums begin to explode. As reimbursements continue to be reduced, your vet continues to raise his or her prices to maintain last year’s income level, and MetLife raises your premium costs. As vets raise procedure costs again and again, MetLife will raise premiums again and again, so it becomes a vicious circle.

Within a decade, your vet’s costs will be out of reach for ordinary people, and vets (like hospitals) will be treating pets of indigent owners as a community service in their clinics. To recover those costs, vets will again be forced to raise their fees, and again MetLife will have to raise your insurance premiums or reduce coverage. Then the federal government will be asked to help rein in the high cost of pet care. Congress will pass laws to protect Americans with pets, and campaigning politicians will promise lower pet-care costs and better access, and legislate discrimination-free pet health care. Does this sound familiar to you?

Today’s pet insurance is as affordable as human health insurance was 50 years ago, when the doctors and hospitals controlled their costs. Today, about 55 percent of your human health-care premiums are paid out to hospitals, testing services and physicians. The other 45 percent pays for the insurance company’s salaries, entertainment, advertising, lawyers, accountants, rent, sales commissions, computers, executive jets, sponsorships of Professional Golfers Association and Association of Tennis Professionals tournaments, fancy artwork, secretaries and plush offices. Today, about 60 percent of your pet insurance premiums are paid to your vet and his or her veterinary hospital, and 40 percent pays salaries, secretarial help, office supplies, postage and travel. In the next 10 to 20 years, that ratio will reverse to 35 percent to 65 percent.

Pet insurance, like human health insurance, was originally noble in its intent. Today health insurance is part scam, and soon pet health insurance will follow in its footsteps.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.© Copley News Service