As of January, the National Cancer Institute and the American Cancer Society estimated there were between 14.5 million and 19 million cancer survivors living in the United States. The Society estimates there will be an additional 1.6 million cases this year. With numbers like that, there’s a good chance some of your clients are struggling with a cancer diagnosis.
A report released at the end of September by the Washington National Institute for Wellness Solutions put the average monthly cost for cancer treatment at $712, not including lost income if patients have to stop working during treatment.
Furthermore, over a third of survey respondents said they needed more financial support during treatment. By comparison, 22% of cancer survivors said they needed more emotional support.
The Institute for Wellness Solutions is a research and consumer education program from insurer Washington National. The report, “Insights from Survivors: Managing the Personal, Emotional and Financial Impact of Cancer,” surveyed 400 people who were diagnosed with cancer between the ages of 25 and 65 and had been treated with radiation or chemotherapy in the past 10 years.
One element of financial support is cost avoidance, according to Barbara Stewart, president of Washington National. “There are insurance products that can help people avoid being in that situation” where they have to pay large costs out of pocket.
In addition to supplemental insurance products, “you have certain services that are often available to patients while they’re going through treatments,” Stewart told ThinkAdvisor on Monday. For example, respondents recommended the American Cancer Society’s Hope Lodge, Reach to Recovery and the Hope Club programs as services “to help in terms of providing lodging for the patient and caregiver when they’re receiving care at other location,” Stewart said. “This element of helping patients actually think about opportunities to reduce the financial burden” is an important factor in financial support.
She suggested patients try to work with their health care provider to make regular payments over time instead of trying to cover a huge fee in a single payment.
“One of the things that every patient should pursue is a discussion with their hospital related to the opportunity for no-interest loans,” Stewart said. “It behooves all hospitals to be able to be paid at some point. They recognize, especially when you’re walking in with a high-deductible health plan, that there’s a considerable expense that’s incurred immediately.”
Stewart added that it’s become increasingly common for hospitals try to establish a relationship with a bank to provide “a bridge to help people be able to provide some kind of payment up front, then carry the rest of the expense over a period, often up to two years.”
Almost 60% of respondents said they underestimated at least one financial aspect of their diagnosis, like lost income from missing work or uncovered out-of-pocket expenses, and two-thirds didn’t have enough household income to cover all their treatment expenses.
Nearly 40% of survivors were able to cover their treatment without incurring medical debt, but of those who weren’t so well-prepared, 30% have $10,000 or more in debt related to their health. Half of those have at least $20,000 in debt.
Cancer hit younger survivors especially hard, the report found. Eighty percent of survivors who received their diagnosis under age 50 had to use at least one additional resource, like withdrawing money from personal savings or investment accounts, to cover out-of-pocket expenses.
As cancer advances, the cost increases as well. The report found survivors whose cancer reached stages three or four consistently faced higher-than-expected costs associated with lost income, lifestyle changes, hiring help with household responsibilities and traveling for treatment.
Advanced-stage survivors and those diagnosed under age 50 were also far more likely to incur medical debt upwards of $40,000: 11%, compared with 1% for survivors with stage zero, one or two cancers and 2% for those diagnosed after age 50.
Stewart said there was a lack of awareness among consumers about supplemental insurance products that help defray the cost of expensive treatments. In a survey Washington National conducted last year among 1,000 middle-income Americans, only about one in 10 said they felt financially prepared for a critical illness or major health event, Stewart said.
“In this study we actually pursued that some more,” she continued. “What was common in both studies is there is something called supplemental insurance, which people can purchase in addition to having medical coverage.”
The current survey found 84% of cancer survivors didn’t have supplemental insurance during their treatment. Just 7% had critical illness or cancer policies, while 9% had some other supplemental insurance.
“Supplemental insurance can be anything from hospital-specific coverage to cancer-specific or a critical illness policy,” Stewart said. They typically provide a lump sum or indemnity benefit for specific needs, she said. “For our thousands of policyholders, that ends up being a lifesaver when they’re actually going through treatment, because not only do you have your treatment-related costs, but you have other things like if you need a caregiver or if there are additional transportation expenses.”
Even before a client receives a cancer diagnosis, advisors should take the time to address the possibility of a critical illness and how it could impact the client’s financial security. As the survey found, cancer doesn’t wait until you turn 65. In 2013, 46% of new cancer cases were in patients under 65, according to the American Cancer Society.
Furthermore, Stewart pointed out, one in three women and one in two men will have a “cancer event” at some point in their lives. “It’s absolutely necessary as part of the conversation,” she said.
“It should be encapsulated in the overall conversation as it relates to health care coverage,” Stewart said. “The first thing is people need to understand what their coverage provides for these major events.”
Increasingly sophisticated — and therefore increasingly expensive — treatment options make it that much more important to plan early, she said.
“To the extent that the advisor is actually familiar that there is a history of cancer in that family, it’s even more important that they raise the subject because, unfortunately, once you have cancer you can’t get coverage.”