Will you need a cancer insurance policy?

Cancer cases are projected to increase by 40 percent between now and 2025. Here's how enrolling in a cancer plan could help you.

Recent news reports and studies have delivered a troubling diagnosis on the cost of cancer treatment and access to the best cancer care in America.

Doctors and insurance companies are fighting with drugmakers on the skyrocketing cost of cancer drugs. Many of America’s top cancer hospitals are not included in all insurance plans on state exchanges. And, the demand for treatment is expected to outweigh the number of cancer specialists available in the coming years.

While the Affordable Care Act has greatly expanded coverage for millions of Americans – people with cancer cannot be denied coverage or charged more due to pre-existing conditions – a cancer diagnosis will still require a significant amount of medical care and expenses that can go far beyond what your health insurance covers.

For decades, one of the top cancer priorities has been to increase survival rates. As a result, the American Society of Clinical Oncologists (ASCO) says, “More people are surviving cancer than ever before. Two-thirds of Americans now live at least 5 years after a cancer diagnosis, an increase from only about half in the 1970s.”

But now, as the annual number of new cancer cases is expected to increase more than 40 percent by 2025, according to the ASCO’s State of Cancer Care in America 2014 report, millions of Americans will need protection in fighting cancer without incurring a severe amount of medical debt or declaring bankruptcy.

Update:  ASCO’s State of Cancer Care in America 2015 report; ASCO’s State of Cancer Care in America 2016 report.

What is a cancer insurance policy?

Generally speaking, it’s a supplemental policy designed to complement health coverage and help manage the financial risks plus high costs of cancer treatment.

It is not designed to replace your health insurance. Cancer policies also vary in benefits across insurance companies, so it’s important to do your homework.

For example, an indemnity policy offers specific coverage for the medical care associated with cancer after diagnosis. And, other cancer policies provide a one-time, lump-sum cash payment upon diagnosis to use however a policyholder chooses, including the medical and non-medical costs not covered by health insurance.

While cancer plans have been offered by several insurance companies for decades, these policies are receiving more attention as Americans adapt to a consumer-driven health marketplace, and people have become more aware of the financial toll cancer can have. Just last year, the Fred Hutchinson Cancer Research Center released a study that indicates cancer patients are almost three times more likely to declare bankruptcy than those without cancer.

Things to consider

If you are at a higher risk of being diagnosed with cancer based on your family history and lifestyle habits, a cancer policy could help when you would need it most.

Typically, the application process for cancer insurance is just a short list of questions, and no medical exam is required. However, if you have been previously diagnosed with cancer, you are likely not eligible for a policy.

When considering cancer insurance, here are some important items to check for when researching a policy to complement your current health insurance plan (or during your next enrollment period):

  • Refer to your Summary of Benefits and Coverage (SBC) – required by the ACA for all health insurance plans – which should be an easy-to-understand document with details on the benefits and costs you are responsible for.
  • What would your health insurance really cover if you were diagnosed with cancer? Does it include “catastrophic” coverage with high deductibles and low premiums? Are alternative treatments included?
  • What choices in doctors do you have? Would you have in-network access to America’s leading cancer centers if you were diagnosed?
  • Does your health insurance provide the best prescription drug coverage available? What would your co-pays be like if you were diagnosed?

It’s also important to keep in mind that a cancer diagnosis can comes with a significant amount of unplanned for expenses, such as traveling for care, missed work days and lost wages, or treatment-related products like wigs and dietary supplements.

Is cancer insurance worth it?

Although the new ACA-compliant health insurance plans do not have the sort of gaping coverage holes that some plans had in the past, they can still have a significant out-of-pocket exposure. Under Obamacare, out-of-pocket costs for in-network care can be as high as $6,350 for an individual and $12,700 for a family. (These amounts will increase to $6,600 and $13,200 in 2015.)

According to a study conducted by Bankrate last year, more than three quarters of Americans do not have enough savings to cover six months of expenses, and half of Americans have less than three months of expenses saved. Even with a solid ACA-compliant health insurance plan, cancer treatment can leave you with $6,350 in out-of-pocket expenses, assuming you receive all of your care from in-network providers. That’s a tough pill to swallow for families without significant savings stashed away.

And that’s just the medical bills. What if you have to take unpaid sick time from work? How long would your financial reserves last? A cancer insurance policy with an affordable monthly cost and a lump-sum cash payout of $50,000 could certainly help when you need it most.

Where to find cancer insurance policies

Several insurers offer various types of cancer policies to purchase, including Guarantee Trust Life, Medico and United American. You can also quote and compare lump-sum cancer or critical illness policies from different insurance companies at CancerInsurance.com.

Or, speak with a licensed insurance agent to get you more information about cancer insurance and options.

Find affordable health plans

Since 2008, we’ve helped more than 16 million people.

(Step 1 of 2)

Recent articles

5 ways to stay insured after college graduation

Student health insurance: required reading

Billions in ACA rebates show 80/20 Rule’s impact

Related terms

critical illness plan

health insurance

pre-existing condition