News & Information

Equine Insurance insights: Supplement Colic Programs vs. your Insurance

Submitted by: Danielle Aamodt
Email Address: DanielleAamodt(at)gmail
Date Added: 1/7/2017

"If I have SmartPak ColiCare or Platinum Performance EQCO coverage, does that affect my insurance?"

I have been asked this question by several clients, and the answer is tricky. I had to do some research & confirm it with a few of the insurance companies I work with. But the short answer is: YES.

According to both SmartPak & Platinum Performance, their programs are not considered insurance and they work independently of any other type of repayment. So, if you sign up for the SmartPak ColiCare program or Platinum Performance EQCO coverage, follow their stipulations and file a claim, you will be reimbursed regardless of insurance. SmartPak ColiCare calls itself a "great complement to Equine insurance policies, as a way to provide additional financial coverage".

That sounds great. But here's what they aren't telling you:

While the colic reimbursement programs work independently of any insurance, an insurance policy does NOT work independently of the reimbursement programs. It doesn't go both ways!

The nature of insurance is to protect the insured person from major financial losses due to a specific cause (death of a horse or Vet expenses). And in the event of a claim, the company will return you to nearly the same financial position as before the loss.They call this a contract of indemnity. But the indemnity principle also determines that an insured person should NOT make any PROFIT from the loss.

Because of this rule, ALL types of insurance policies have wording that inhibit a person from collecting additional insurance or protection on the same type of loss. (i.e. your colic reimbursement) Even though the colic programs don't call themselves insurance, it is still a financial protection for the same specific cause . . . and the insurance company can't pay you for something you've already been paid for. That would make it a profit on the same loss.

It makes sense from a horse's perspective . . . if people could profit from the death of a horse, the odds are not in their favor!


What does all of this technical wording actually mean in the case of a colic surgery claim?

Let me use an example:
*disclaimer: I'm NOT a certified Claims Adjuster, so this is a very vague example*
Your horse is insured for $10,000 Mortality value & has $10,000 in Major Medical/Surgical coverage. You are also enrolled in a Colic reimbursement program.

(God forbid) Your horse colics & goes in for Colic Surgery, then you end up with a total bill of $10,000.
Those charges may include costs from the Farm visit, Exam fees, Banamine injection, then the Clinic fees, Surgery, Anesthesia costs, Aftercare, etc.

When you submit a claim to your Claims Adjuster on the insurance policy, they review each individual cost & assess whether it was a covered cost on your policy or not. (i.e. farm call fees are generally not covered) Depending on the company you're insured with, you will also have a Deductible & possible co-pays that you are responsible for.

It's good to note that the supplement colic programs ONLY reimburse for the expenses of the colic surgery & clinic expenses.
SmartPak reimburses for "only those costs incurred for a surgical colic incident, namely Preoperative care incurred at a veterinary surgical facility, Surgery exclusive to the digestive tract incurred at a veterinary surgical facility, and Postoperative care incurred at a veterinary surgical facility".
Platinum Performance pays for "only those costs incurred for a surgical colic incident . . . include the following: 1. Preoperative care provided at a veterinary surgical facility, 2. Surgery (limited to the digestive tract) provided at a veterinary surgical facility, and 3. Postoperative care provided at a veterinary surgical facility."
Neither of them pay for the Medical care before or after the Clinic, so only the expenses at the Clinic are "double insured" per se.

Back to the example, let's say your Colic program pays you $6,000 towards the colic surgery & clinic costs.
THEN, your claims adjuster with the insurance company has determined that your Medical/Surgical coverage will pay you $7,500 of your entire bill (after deductibles, co-pay, etc.).
If the insurance company is aware of the payment from the Supplement program, they will actually consider the $6,000 to be part of your reimbursement & they will take that amount OUT of their claim payment - so they aren't overpaying you for the same cause of loss. You would receive $6,000 from the Colic program & only $1,500 from your insurance company, because the program's payment would be considered "primary" to your insurance coverage.

It may seem hard to understand, because you still have $2,500 left on your bill. You probably thought SmartPak would make up the difference (because they advertise it that way!) for any expenses not covered by your insurance. But it doesn't necessarily work that way.

Now, before you start hating on insurance companies for deducting SmartPak's payment from their claim responsibility, just remember that the universal rules of insurance exist to prevent devious acts of fraud. (We've all heard those stories of horrible things people do to collect on insurance payments, including killing horses) Don't blame the insurance companies for protecting themselves against the crazies out there.

The supplement companies just happened to come up with a brilliant plan to get people committed to continuous use of their products. - not saying that's a bad idea either. But let's at least see it for what it is - a brilliant marketing tool. It's a fantastic option for people who can't afford insurance, but I wonder how costs compare for premiums vs. endless auto-supply of supplements.

While I understand that nobody loves the insurance industry, at least it's up-front about what it is. You pay a lesser amount of money to have access to 2-3x the amount of money, if you happen to need it. And I see unfortunate stories of people who need it all the time. They are relieved to have the finances available when they have to make that sudden decision about a colic surgery. They know they can afford it, so they just go.

Those situations will ALWAYS be stressful, so don't add to the stress by misunderstanding how your coverage will respond. Whether you choose the insurance route or the supplement programs, or both - know what to expect when it's all said & done.