California’s new pet insurance law adds some tough coverage requirements
The law includes new preexisting condition exclusion and waiting period rules.
California now has a new pet health insurance law that could serve as a laboratory showing what happens when the government adds coverage requirements to what has been a largely unrelated market.
Gov. Gavin Newsom, a Democrat, today signed a pet insurance bill introduced by state Sen. Steven Glazer, D-Orinda, Calif., that’s based heavily on a model developed by the National Association of Insurance Commissioners.
It will require issuers to provide more information about the effect of a pet’s age and location on the premiums.
It will also require insurers to provide more information about preexisting condition exclusions, and it will require an insurer that accepts an application to make the coverage effective the second day after receiving the completed application and payment.
Related: Is pet insurance worth the cost for employees? 2023′s most expensive paid claims for dogs
The North American Pet Health Insurance Association supported the bill, but Trupanion, an insurer that writes pet health insurance in California, opposed the bill because of the coverage effective date provision.
Setting the effective date for the coverage a few weeks or a few months in the future discourages people from buying pet insurance when they already know a pet is sick, the company said in a comment.
Traditionally, regulators have classified pet health insurance as a form of property and casualty coverage, rather than a health insurance product.
But many employers include voluntary pet health insurance products on their cafeteria plan menus, and the pet health insurance market can serve as a laboratory for the forces shaping the human health care and human health insurance markets.
Like the market for plastic surgery done purely for cosmetic reasons, pet care may reflect the underlying economic forces, such as provider education costs and pharmaceutical manufacturing costs, shaping human health care costs, because pet care occurs mostly outside of the regulatory and financial framework that applies to human health care.