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Financial Help for Cancer Patients: What Are Your Options?

When diagnosed with cancer, the last thing you should have to worry about how you're going to cover the cost of treatment. Fortunately, the right insurance can help — if you're proactive.

It might surprise you how much at risk you are of getting cancer.

According to the National Cancer Institute, about 40 percent of people will be diagnosed with cancer at some point during their lifetimes. So if you’re in a group of five people, odds are that two of you have either had or will be diagnosed with cancer.

Cancer treatment today

Modern medical technology has made cancer more treatable and survivable than in the past. People can overcome a diagnosis and live for many years, sometimes with little residual effect. Others survive multiple bouts of cancer throughout their lives while doing most of their normal activities.

Regardless of how serious a cancer diagnosis is, getting one will likely be costly to you financially.

There will be a number of doctor visits, lab tests, CT scans, and MRIs. You may have to undergo chemotherapy or have your cancer surgically removed. Your treatment may also consist of expensive prescription drugs, follow-up doctor visits, and other medical procedures.

How prepared are you for a potential diagnosis? Much of that depends on how much insurance you have.

The cost of cancer without health insurance

Here’s what you potentially face financially if you’re diagnosed with cancer without insurance.

Without health insurance, you will be responsible for 100 percent of the cost of treatment. Your options will be few. You could ask for charitable donations from friends, family, or crowdfunding websites. Another option is declaring bankruptcy and having medical debt and other obligations wiped away; however, this will create a long-lasting negative effect on your creditworthiness.

It’s difficult to provide an estimate or average for cancer treatment costs because of the many types of cancer and the varying severity each patient experiences. But multiple sources show it’s common for treatment to cost between $100,000 and $200,000; sometimes more and sometimes less.

The cost of cancer without supplemental insurance

Even with health insurance, you may be on the hook for thousands of dollars in medical bills. That’s because health insurance plans rarely cover 100 percent of medical bills. You will likely have a deductible and coinsurance to pay. In most cases, you’ll have to cover 20 percent of the overall cost of cancer treatment.

That means if you run up a bill of $150,000, your health insurance policy will pay $120,000 of the cost. You will be responsible for the remaining $30,000.

An article published in the Journal of Clinical Oncology showed that up to 16 percent of insured cancer patients quit their treatment plans because they couldn’t afford the out-of-pocket expenses.

Here lies the value of supplemental insurance. More on the various types of coverage that can help you close the gap in a bit.

The cost of cancer without disability insurance

The last burden you may have without insurance is your inability to work. Chemotherapy and other cancer treatments can prevent you from working or limit how many hours you can devote to your job while undergoing treatment.

According to the Council for Disability Awareness (CDA), cancer is among the fastest-growing causes for disabilities that impact income. It’s also an example of why people should purchase disability insurance when they’re young. According to the CDA, it’s diagnosed in about 70,000 people in their 20s and 30s each year.

Without disability insurance, you will have little to no income at a time you’re racking up large medical bills.

Many cancer patients are not prepared financially

According to a 2019 survey conducted by The Mesothelioma Center, 63 percent of cancer patients and loved ones reported financial struggles following a cancer diagnosis.

Another 2019 study by the Fred Hutchinson Cancer Research Center in Seattle showed cancer patients are 2.5 times more likely to file for bankruptcy after they are diagnosed.

The Journal of Clinical Oncology showed that cancer patients with nine different types of the disease all had around a 40 percent chance of filing bankruptcy after five years of diagnosis.

Fighting cancer with adequate insurance

Now imagine the same cancer diagnosis for a person with an adequate amount of insurance.

Health insurance covers 80 percent, give or take, of your treatment costs. So how would you cover the other 20 percent, especially if it’s a five-figure bill?

You have a few options. Most of these options come under the heading of supplemental health insurance, which are plans designed to help fill the gap between what health insurance does and does not cover.

Critical illness insurance

First, there's critical illness insurance (CII). This type of insurance pays a lump sum benefit if you are diagnosed with a covered illness. In addition to cancer, CII policies often cover heart attacks, strokes, organ damage, and other serious conditions.

A potential downside to CII is that the severity of an illness dictates whether you receive benefits. Policies pay partial benefits for less serious conditions. And you may not receive benefits at all if the condition is easily treated, such as a cancer diagnosis that was detected early.

Depending on the policy, a CII policy could pay you a maximum lump sum of $10,000 to $75,000 or even more. What's important to understand is the money you receive can be used however you want. Cover medical expenses, keep up with bills at home, pay for childcare — seriously, whatever you need.

Curious what critical illness insurance costs? Check your rate here.
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Cancer insurance

Another option is cancer insurance. This is a supplemental insurance policy that offers benefits for expenses related specifically to a cancer diagnosis. Cancer policies vary on eligibility requirements, what is covered and how payments are made. Some pay a lump sum when you receive a cancer diagnosis. Others pay for specific treatment and care expenses, either to you or directly to the provider.

Policies vary, but you could receive benefits ranging from $10,000 to $100,000.

Cancer policies are often available through an employer’s benefits program, though employees typically have to pay the full cost. Individually purchased cancer policies are also available through some insurance carriers.

If you’re hospitalized because of cancer, you could benefit from a hospital indemnity insurance plan. This is a type of policy that helps cover the costs of hospital admission that may not be covered by other insurance.

Plans typically provide benefits to you when you are admitted to a hospital or ICU for a covered sickness or injury. However, there are some policies that will also pay a benefit for outpatient surgery, emergency room visits, stays in a rehabilitation facility, and ambulance services.

Hospital indemnity policies typically pay a lump sum directly to you, not a hospital or medical facility. That means you can use the benefit for any purpose, whether to cover the cost of care or for a non-related purpose.

Add an HSA for additional protection

It’s also not a bad idea, if you have a high-deductible health plan, to put aside money in a health savings account (HSA).

An HSA is a tax-preferred savings account that enables users to set aside tax-free dollars to pay for health expenses, including regular medical care, dental and vision expenses. HSA funds would also be useful to spend on cancer treatments. A limitation of HSAs is that you can only contribute to one if you are covered by a high-deductible health insurance plan.

If you have both an HSA and one of the supplemental plans, you have more options. Perhaps your supplemental plan pays you the benefit directly, which means you could use it for any purpose at all. Therefore, you could perhaps cover your out-of-pocket costs with your HSA funds and use the supplemental insurance plans for other needs that arise during this time. Another possibility is that your supplemental plan still doesn’t cover the full cost of treatment, so you can also use HSA funds to bridge that gap rather than other savings and investments you have.

The role of disability insurance for cancer patients

Now about that lost income you endured while undergoing treatment.

Disability insurance covers the potential loss of income caused by injury or illness. If you are unable to work because of a covered disability, the policy will replace part of your income. You will receive these benefits for as long as you’re disabled or up to a maximum period of time spelled out in the policy.

Having long-term disability insurance means being able to buy food, pay bills, and cover household expenses while you’re unable to work.

However, disability policies include a waiting period, also known as an elimination period. This is the period of time between when a disability occurs and when benefits are paid.

The elimination period for disability insurance is similar to the deductible on property insurance. It’s the part you pay out-of-pocket before benefits kick in. The longer the waiting period on disability insurance, the less you will pay in premium.

Elimination periods for long-term disability can be as little as 30 days or as long as a year. The standard length is 60 or 90 days.

Curious what disability insurance costs? Check your rate here
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Putting it all together

Now imagine you have health insurance, disability insurance, one of the supplemental plans, and an HSA.

You are diagnosed with cancer and incur $150,000 in treatment, plus you’re on limited duty at work for 18 months. Some days you can work a few hours, but you also miss weeks at a time.

  • The health insurance policy covers $120,000 of the treatment cost.
  • Your disability insurance policy covers most of your lost income, except for the 90-day elimination period at the beginning of your disability.
  • You managed to save about $17,000 in an HSA thanks to your discipline and relative good health for several years. You use that money to cover more than half of the out-of-pocket cost from the cancer treatment.
  • The remaining $13,000 you pay for out of the supplemental health insurance plan you purchased. There’s also enough money from that one-time benefit to cover most of the 90-day elimination period on the disability policy, during which you had no income.

Of course, this is purely hypothetical, and your situation probably wouldn’t work out this ideally. You also have to consider these insurance policies will require regular premium payments, and there’s a 60 percent chance you’ll never get cancer.

But every bit of the burden of going through cancer that somebody else can cover is less than you will be saddled with. Even a debt of, say, $8,000, is far more manageable than one approaching $200,000.

If you can afford to contribute to these insurance plans, you’ll be much better prepared financially if and when cancer strikes. You will therefore be able to focus on your treatment and recovery and hopefully have less anxiety about the financial toll the disease is taking on you and your family.

The best time to buy these policies is as soon as you can. Cancer can occur at any time. If you wait until you become diagnosed, it will be too late.


Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.