It’s dreaded news that no one wants to hear: You have cancer. Yet the probability is that nearly half of all men in the United States and more than one-third of all women will be diagnosed with some form of the disease during their lifetimes, according to the American Cancer Society.
A cancer diagnosis can cause both physical and financial hardship, especially if you’re the family breadwinner.
Even if you have health insurance, it may not cover all of your cancer treatment and medication and that could leave you with unexpected expenses. In fact, costs can be so exorbitant that the American Cancer Society says some people may stop treatment early or not get it at all because they cannot afford it.
Chemotherapy costs can vary by many things: the type of cancer, stage at diagnosis, the kind of drugs used, how drugs are administered, and where you are being treated. For example, 10 years worth of treatments for breast cancer can cost an average of $21,000, while prostate and lung cancer treatments hovered around $40,000, according to data from the National Cancer Institute.
Traditional chemotherapy drugs can cost from $300 to $800 for about an eight-week course of treatment, although some of the more commonly insured medications may cost as low as $100. But some new drugs can be expensive, and run into the thousands.
The National Cancer Institute offers a table of cause-specific five-year survival rates by ethnicity in the United States from 2001 to 2007.
Should you insure against such a calamity? Cancer insurance, though relatively unknown, has been around for decades. But is it right for you?
What is it?
Cancer insurance is supplemental coverage that provides benefits once you’ve been diagnosed with cancer. While policies vary on cost, coverage and benefit amounts, cancer insurance is typically used to cover out-of-pocket expenses and services not covered by your health insurance plan, such as compensation lost from missing time at work or mortgage payments. And unlike medical insurance, many cancer policies allow for benefits to be given directly to you.
You generally would purchase cancer insurance in addition to other comprehensive medical insurance you already have – it’s not a replacement for health insurance, experts warn.
Yet agents who sell cancer insurance say it’s a much-needed backup plan.
“A lot of people always think, oh, it’s not going to happen to me,” says Allstate agent Loreen Worden of Santa Clarita, Calif. “But cancer is such a widespread disease, we cannot predict it. It’s really important for everyone but especially … those with a history of cancer in their family and those in the 40 and over age group.”
Be sure to read the fine print before purchasing a cancer plan – these types of policies often come with a laundry list of limitations and exclusions.
For example, in Illinois you must wait up to 30 days from the effective date before a cancer policy will pay benefits. If you’re diagnosed with cancer during that probationary period, you may not be covered.
Also, if you’re diagnosed with cancer after the probationary period, but symptoms were present before the effective date of coverage or during the probationary period, coverage may be denied, according to the Illinois Department of Insurance. In addition, there are some policies that don’t cover skin cancer.
For instance, AFLAC does not cover skin cancer in its lump sum policy and Allstate does not cover first occurrence, but there are other procedures that would follow a bought with skin cancer that could be covered, such as surgery or medications. If you have or have had skin cancer or you might be at risk for skin cancer you might want to discuss what is covered with your insurance agent. Is you’re a smoker, Allstate says this would have no bearing on the rate you would pay for a cancer insurance policy. In fact, you would be paying the same amount for a policy as a non-smoker.
The National Association of Insurance Commissioners offers advice about cancer insurance policy limitations, they include:
- If a policy only pays for hospitalization, radiation treatment, chemotherapy and surgery might all have to be performed in a hospital. A cancer patient can seek out care at an outpatient facility, but if their cancer policy only covers hospitalization, it won’t pick up the bill.
- There may not be a need for an increase in benefits if the increase is the result of a 90-day hospital stay. The Wisconsin Department of Insurance explains that the average stay for a cancer patient in the hospital is only 13 days.
- Look out for fixed dollar amounts. If your policy only pays $1,000 for radiation therapy, what happens if the bill is $2,000 or $3,000? Who pays then? Some plans limit your total benefits package by $5,000 to $10,000.
- Cancer-related illnesses are often not covered. In other words, if you developed an infection or pneumonia due to your bought with cancer.
What is generally covered by cancer insurance?
Medical:
Copays
Hospitalization (Some policies only pay for hospital stays)
Diagnostic tests
Medication
Not covered:
Home health care
Transportation
Rehabilitation costs
Despite frightening cancer statistics, some consumer advocates are not convinced that cancer insurance is worth purchasing, especially if you have a moderate risk for developing cancer. Since some health insurance companies have taken cost-cutting measures when it comes to covering expensive cancer treatment drugs. This is where a cancer insurance policy can help. While your current medical plan may not cover certain “new” cancer treatment drugs, a cancer policy may pick up that medical expense.
If you are considering a cancer insurance policy, check to see if there is a coordination of benefits clause (COB). In order to prevent duplicate coverage, the provision ensures that benefits cannot exceed 100 percent of the allowed medical expenses submitted to the insurance company. In other words, your cancer insurance policy won’t cover the expenses already covered by your health insurance plan.
The National Association of Insurance Commissioners says duplicate coverage is unnecessary and expensive. It advises consumers to consider three things before purchasing this type of insurance: Is my current medical coverage adequate? How much will treatment cost if I do get cancer? And how likely am I to get cancer?
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade association representing the health care industry, says there are false perceptions about cancer plans.
“People need to understand what cancer insurance is and is not,” Zirkelbach explains. “It’s not designed to pay for medical care. It’s designed to cover other out of pocket expenses, such as the mortgage and other bills, while a person is getting treated for cancer. With any type of insurance, you should know what your policy covers.”
