The rising costs of having pet insurance

It has never been more expensive to own a pet, as evidenced by the Bureau of Labor Statistics reporting veterinary care prices skyrocketing 60% in the last decade.

This in turn is making pet health care an extremely lucrative business sector.

"The global veterinary care market size was estimated at $87.3 billion in 2023 and is projected to grow at a (compound annual growth rate) of 8% from 2024 to 2030," according to market research and consulting company Grand View Research.

The influx of private equity and corporations owning vet practices is forcing the consolidation of clinics and putting a focus on profits, which can mean pet owners are paying more.

Technology is also a contributing factor to the final bill. Just as there are advances in human care, the same goes for animal health. MRIs, other scans, drugs and surgeries often come with a hefty price tag.

According to the California Department of Insurance, a vet cannot charge different prices based on whether an animal is insured.

"If I didn't have pet insurance, I don't know if I would have a dog anymore," one Sonoma County woman said. "I have naughty dogs who eat things they are not supposed to."

She was shocked when it cost $12, 000 at VCA Animal Care Center in Rohnert Park to remove an acorn from her Dachshund earlier in 2024. In the past even a back surgery for one of her pups only cost about $5, 000.

Her insurance, Embrace, covered the surgery, but the way pet insurance works is the person has to pay the vet, submit an invoice to the insurance company, and then be reimbursed.

Consolidation in care Privately held Mars Inc., which most people know as the parent company of M&Ms and Snickers, is the largest single owner of veterinary clinics, having purchased VCA clinics for $9.1 billion in 2017.

Its pet care division owns Pedigree, Iams, and Nutro pet foods.

In Sonoma County, there are 10 VCA animal hospitals, eight of which are general practice hospitals, and two are emergency and specialty hospitals. Marin County is home to three of the general practice animal hospitals, while Solano County has one. Napa County has no VCA animal hospitals, although the county does list several other pet hospitals.

Mars' vet practices are worldwide. In 2018, the company acquired AniCura, which has nearly 500 clinics that care for about 4.5 million animals in 15 European countries.

Also part of the Mars' veterinarian conglomerate are: Banfield Pet Hospital, BluePearl, Creature Comforts, Gentle Oak, Hillside, Linnaeus, Mount Pleasant and Taiwai.

In summer 2024, Mars added to its Petcare's Science & Diagnostics division with the acquisition of Cerba HealthCare's ownership stake in Cerba Vet and ANTAGENE.

A KPMG report shows vet clinics in the United States, of which there are roughly 40, 000, are primarily owned by doctors (51%), with 29% owned by private equity firms, and corporate ownership at 19%.

Insurance boom While pet insurance has been available in California since 1989, it is a growing industry. The National American Pet Health Insurance Association (NAPHIA) reports nearly 6.25 million pets were insured in North America at the end of 2023, which represents an increase of 16.7% from the prior year.

VCA and other compa- nies would not release the number of clients with pet insurance or how those numbers have changed through the years.

"Typically people with pet insurance spend more. Pet insurance attracts a medicalized pet owner-someone who has a propensity to take their pet in for treatment, someone who doesn't just wait it out and hope it works out," Kristen Lynch, NAPHIA executive director, told the Journal.

She said California is the largest market for pet insurance.

"In California the human-animal bond is perhaps more evolved than other places," Lynch said. "We live, travel, dine, socialize with our pets. We take pets on vacation, to visit our friends. In the more urban markets people are more likely to think of pets as family."

Eleven pet insurance companies are licensed to do business in the state. Cats and dogs are the species most firms insure, with dogs making up the majority in the U.S. at 78.6%, according to NAPHIA.

Prices for policies are based on the animals' breed and age, and the owner's ZIP code. The latter is because vet care tends to be more expensive in urban areas compared to rural locations.

"Breed impacts costs because some breeds have genetic predispositions to certain health conditions, which might require more medical care. Age is also a factor, as younger pets generally incur lower premiums, but these increase as pets age due to the higher likelihood of developing health issues," explained Amber Batteiger with Embrace Pet Insurance.

Like human health care, there can be monthly or annual premiums, the need to meet deductibles, and the likelihood a pre-existing condition won't be covered.

While more people are getting pet insurance, Pet Emergency & Specialty Center of Marin in San Rafael, reports the majority of its clients do not have insurance. Even so, Polina Bulgakova, coordinator at the facility, said the number of people with insurance is increasing, though she did not release any statistics. Most of Pets Best Insurance's clients are in California, with about 80% being dogs and 20% cats.

"It's much more affordable to insure a cat versus dog just because of the cost of care for cats is lower than dogs," Walter Haugland, chief marketing officer for the company, said."Dogs tend to be more accident prone than cats, and their treatment costs tend to be higher."

Kathryn Reed is a journalist who has spent most of her career covering issues in Northern California. She has published four books, with the most recent being Sleeping with Strangers: An Airbnb Host's Life in Lake Tahoe and Mexico. She may be reached atkr@kathrynreed. com, or follow her atkathrynreed.com, BlueSky@deerk.bsky.social, or Instagram @kathrynreed0925.