A cancer diagnosis is no longer necessarily a death sentence. The combination of screening tests to catch cancer earlier and modern treatments are making it more probable that patients survive cancer and go on to have healthy lives. One thing that hasn’t changed, though, is that cancer treatment is expensive. The financial strain this puts on patients adds another worry on top of their concerns for their health. One solution is to use cancer insurance — but is it worth it?
How Expensive Is a Cancer Diagnosis?
According to the National Cancer Institute, the average patient pays $43,516 in medical services and $1,874 for oral prescription drugs in the first year after a cancer diagnosis. However, costs vary considerably depending on what your health insurance covers and the type of cancer you have — meaning your expenses may be much higher.
The negative impact this has on a patient’s quality of life is called financial toxicity of cancer treatment, explains JAMA Oncology. Some of the consequences of this include loss of financial security, rationing of medication, and cutting back on essentials or leisure activities — all of which may lead to anxiety and depression.
How Does Cancer Insurance Work?
Cancer insurance is a supplemental policy for health insurance. If you receive a cancer diagnosis, you’ll have coverage for your treatment costs. This includes for expenses that your primary health insurance does not cover, such as non-medical expenses. Some of the costs a cancer insurance policy may cover are:
- Co-pays and deductibles of your primary health insurance
- Appointments with healthcare providers
- Lab tests and X-rays
- Surgeries
- Preventive screenings
- Prescription medication
- Treatments, including radiation, chemotherapy, and blood transfusions
- Experimental therapies
- Extended hospital stays
- Private nursing
- Reduction or loss of income, if you are unable to work due to your diagnosis
- Child care
- Utility bills
- Transportation to your appointments
- Accommodation outside your home
Types of Cancer Insurance
The type of policy you choose will influence what your cancer insurance covers and how you receive the payout. Most policies fall into the following categories:
- Indemnity policies — Cover all approved treatments related to your cancer diagnosis up to a set limit, which may be less than the total you need for your healthcare.
- Expense-incurred polices — Cover a percentage of the medical expenses related to your cancer diagnosis up to a set limit.
- Lump sum policies — Pay a fixed amount in the event you receive a cancer diagnosis.
Indemnity and expense-incurred policies typically have a deductible and co-pays, whereas lump sum policies do not because they allow you to use the funds however you wish.
Pros and Cons of Cancer Insurance
To decide if cancer insurance would be worthwhile for you, it’s important to weigh the pros and cons.
Pro: Provides Coverage When Primary Health Insurance Is Insufficient
Whereas your primary health insurance will provide some coverage for the medical expenses related to your cancer treatment, this is often not enough to prevent exposing you and your family to financial strain. This is especially likely to be the case if you have a high-deductible health plan (HDHP), as you’ll face high out-of-pocket costs before your health insurance starts covering your medical expenses.
With cancer insurance, you’ll reduce your out-of-pocket costs. This may mean you don’t need to make sacrifices in other areas of your life just to afford treatment.
Con: An Additional Expense
A downside of cancer insurance is you’ll incur an additional expense now for something you may or may not need in the future. The good news is it is unlikely to be a significant expense — a typical policy costs between $10 and $50 a month. However, premiums become higher as you get older. If possible, you should lock in lower rates while you’re young, which means taking out a policy as soon as possible.
Pro: Offers Important Protection That Many People Need
The risk of receiving a cancer diagnosis at some point is high. According to the National Cancer Institute, 40.5% of people receive a diagnosis in their lifetimes. If you have a family history of cancer, your risk may be higher. Similarly, you may be at higher risk if you’ve been exposed to carcinogens, such as in your occupation or through lifestyle choices.
Con: Some Policies Are Restrictive
All cancer insurance policies have some restrictions. For instance, you may only be able to take out a policy if you have not previously received a cancer diagnosis. Plus, if you’ve recovered from cancer in the past, you may need to provide evidence that you’ve been cancer free for a certain amount of time, usually several years. There may also be restrictions on the type of cancers the policy covers. For instance, many policies don’t cover non-melanoma skin cancer.
Pro: Access Other Treatments
Health insurance is often restrictive in terms of what treatments and prescription medications it covers. It’s common that primary health insurance doesn’t cover experimental treatments, which are sometimes a patient’s only option. Cancer insurance is more likely to cover experimental therapies — which could be a literal lifesaver, especially if your cancer is advanced or resistant to treatment.
Other services a cancer policy may offer include:
- Second opinions — Receive a consultation with a second medical professional to explore all your options fully before deciding on a treatment program. This is useful for gaining personalized treatment as well as peace of mind.
- Wellness programs — Provide resources to help you improve your lifestyle, such as through nutrition advice, gym memberships, and educational materials.
- Survivorship benefits — Policyholders who receive a cancer diagnosis can take advantage of survivorship benefits after they finish treatment. A policy may include benefits such as counseling services and access to support groups.
If you have a lump sum policy, there are no restrictions as to what treatments and services you can put your money toward.
Con: Waiting Periods
Some policies have a waiting period of anywhere from several months to a year. You will be unable to make a claim until the waiting period is complete.
Pro: Provides More Than Just Health Insurance
As you saw above, many policies provide coverage for expenses other than medical treatment. If you choose a lump sum policy, there are no limits as to how you can use your insurance payout.
Would Cancer Insurance Be Worthwhile for You?
Although there are some downsides to taking out a separate cancer insurance policy, most people find that the pros outweigh the cons. Plus, there are various plans available, meaning you should be able to find one that provides the benefits you want for premiums within your budget.
How to Take Out a Cancer Insurance Policy
If you’re employed, you may be able to take out a cancer insurance policy through your job. Your company may offer cancer insurance as a group benefit — ask your employer if you’re unsure this is an option. However, you will need to wait until open enrollment to sign up, unless you experience a qualifying life event.
If your employer doesn’t offer cancer insurance — or you don’t want to wait until open enrollment — the other option is to purchase a policy yourself through an insurance provider. Use the opportunity to explore other supplemental policies.
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