If you are diagnosed with cancer, you have two battles ahead of you: to get well and to stay solvent.
Fortunately, you can prepare for the latter, so it doesn't impede the healing process.
"Understanding the costs you can expect before you even begin treatment can help you manage the impact more effectively," says Rosalie Canosa, program division director for CancerCare, a New York-based national nonprofit that provides counseling and financial assistance to cancer patients.
CancerCare receives about 500 calls a day from Americans overwhelmed by cancer's financial burden. Some are among the 50 million who don't have health insurance in this country; others are shocked and scared to find that while their health insurance picks up most of the tab for cancer treatment, their copay or co-insurance portion can still prove astronomical.
"The cost of cancer is increasing at a rate of about 15% per year, (which is) nearly three times the rate of increase of overall health costs," says Canosa. "It's mind-boggling."
Some of that is due to the jaw-dropping cost of new cancer drugs and treatments, says Dr. Otis Brawley, chief medical officer and executive vice president of the American Cancer Society.
"We have a number of drugs in oncology that have been FDA-approved in the last decade or so that tend to cost around $100,000 for a year's treatment," he says. A few examples: $85,000 per year for the colon cancer drug Avastin; $92,000 for the prostate cancer drug Provenge; and $8,000 to $9,000 a month for the melanoma drug Yervoy.
Expensive new procedures such as proton beam therapy and da Vinci robotic surgery can just as easily bust a copayer.
"I get letters every week from people looking for some way to pay off a bill," Dr. Brawley says. "I get the guy who thinks he has great insurance and then his 12-year-old kid gets leukemia, and he finds out that the 20% copay on a $300,000 health bill is more money than he makes in a year. That's a real story."
Canosa says health insurance will typically cover medical expenses, doctor visits, hospital visits, drugs and other medications.
What it won't cover includes your deductible; the copay (a preset dollar amount you must pay each time you have a medical service); co-insurance (you pay a certain percentage of your health care costs); and of course your health insurance premium itself -- you don't want that to lapse just when you need it most.
On top of your ongoing daily living expenses (rent/mortgage, food, utilities and taxes), you may face these additional bills during your cancer treatment:
- Auto fuel and parking expenses.
- Home care.
- Child care.
- Food supplements.
- Lodging expenses for out-of-town care.
- Over-the-counter medications not covered by insurance.
Those bills can loom especially large if you're forced to miss workdays or go on workers' compensation, which can cut your income by 40%.
How can you stave off an avalanche of cancer-related bills? There are several insurance products to consider in addition to -- but never in place of -- a solid basic health insurance plan. They include the following.
Cancer insurance may sound reassuring, but cancer policies often come with more questions than answers.
For starters, they only pay if you get cancer; if you've already been diagnosed, you're out of luck. Then there are the odds: statistically, only 3 in 10 Americans will ever get cancer, according to the National Association of Insurance Commissioners. Nor will a cancer insurance policy help with the nonmedical bills.
Finally, they may contain coverage limits and restrictions, such as inpatient procedures only, that may not pay for the treatment you need.
"I've had lymphoma patients who have been cured for 15 years, and the only time they've ever been in a hospital is when they were born; we do it all as an outpatient," says Dr. Brawley.
These policies cover a large percentage of the medical costs for any accident or sickness, including cancer, once you meet the deductible. "They cost more than cancer policies because they cover more, but they are generally considered a better buy," according to the National Association of Insurance Commissioners.
Critical Illness Insurance
Popular overseas, critical illness insurance is making headway in the United States by providing supplemental coverage for the top three critical illnesses: cancer, heart attack and stroke. Some policies will pay for all three, for example, if you get cancer in your 50s, a heart attack in your 60s and a stroke in your 70s.
But the top-selling feature of critical insurance? You receive a lump-sum payout upon diagnosis to use as you choose for medical and nonmedical bills. No waiting months for reimbursement.
"The bottom line is, if you get cancer, you need cash," says Jesse Slome, executive director of the American Association for Critical Illness Insurance, or AACII.
The AACII lists the following average annual premiums by age group for a male nonsmoker based on a $40,000 benefit. Age 40: $575 to $610; age 45: $745 to $785; age 50: $940 to $980. Tobacco users can expect to pay roughly double. Rates also may vary depending on your current health and medical history.
If you qualify for Medicare, most outpatient treatments for cancer are covered 80% by Medicare Part B. If you're concerned you won't be able to cover the remaining 20% for treatments such as radiation and chemotherapy, the thrifty solution may be to purchase a Medigap supplement that picks up your 20% of the bill.
Medigap policies, which are underwritten by private insurance companies, vary widely by company and by how they set their premium rates. Community-rated, or "not-age-related" Medigap policies cost the same regardless of your age, but your premiums may increase with inflation or other factors. You may save money if you buy an "issue-age-rated" Medigap policy, which fixes your premium based on your age when you buy the policy. A third option, an "attained-rated" Medigap policy, offers relatively low premiums for younger buyers that increase as you age.
Canosa sees brighter days ahead for cancer patients, thanks to the Patient Protection and Affordable Care Act. Health care reform not only barred insurers from denying coverage due to pre-existing conditions, it removed the lifetime policy benefit cap that once tossed cancer victims out in the cold.
"You can get to that lifetime cap pretty quickly with cancer," she says. "A lot of policies are capped at $1 million. It doesn't take long to get there."
Should cancer bills storm your insurance walls, CancerCare, the American Cancer Society and many other programs offer grants and loans for cancer patients. A good place to start is the Cancer Financial Assistance Coalition, a searchable database maintained by 14 organizations as a resource for cancer patients in financial need.
"Start this conversation with your health care team," Canosa says. "Often they're linked to resources, including less-expensive options."