LifeGuide Partners on how to avoid financial toxicity while paying for cancer treatments
Financial toxicity is a growing concern for people who have been diagnosed with cancer and the fiscal reality of paying for treatment. With the addition of targeted therapies and immunotherapy, the cost of cancer regimens has skyrocketed, often exceeding more than $100,000 each year for some patients. (1)
Beyond direct care costs, there are other significant drivers of financial toxicity. Cancer patients may also endure a loss of work productivity – reduction in work hours, missed days at work, or job loss.
With more than 200 different types of cancer, there is no “one size fits all” cancer treatment. There are, however, several consistent factors that contribute to patients’ overall costs for their care. The maximum out-of-pocket limit for 2020 insurance plans is $8,200 for individual plans and $16,400 for family plans.
“When someone is diagnosed with cancer or a serious illness, one of the two questions they have is they want to find the best doctors. Secondly, how are they going to find the funds to pay for it.”
Some of the out-of-pocket components that determine what patients pay include premiums, deductibles, co-payments, co-insurance, in-network vs. out-of-network, balance billing, and out-of-pocket maximum. Together, these costs contribute to potential financial toxicity for the patient and family.
According to The Mesothelioma Center, 63% of cancer patients faced financial struggles following a cancer diagnosis. Nearly 20% of cancer patients and their families estimated they spent more than $20,000 each year in total out-of-pocket costs. (2)
“Not only do financial stressors negatively impact healing,” says Scott Page, the CEO of LifeGuide Partners, “but they can also cause frustration, despair, and loss of hope for all involved.” “There are multiple ways to approach how to pay for medical care. Even if you have medical insurance, you’re still going to be hit with out-of-pocket costs and deductibles.
“We urge patients to take a look at their existing life insurance policy. You can convert that policy into the cash you need and, in many cases, receive the money tax-free.”
Selling your life insurance policy
If you own a life insurance policy, you can:
- Change the beneficiary (unless the policy has restrictions).
- Use the insurance policy as collateral for a loan.
- Borrow money against the insurance policy.
- Sell the insurance policy to another person or entity.
Selling the policy to a third party is where a life settlement comes into play. In the past, to get out of a life insurance policy, you surrendered the plan or waited for it to lapse.
However, you can sell the insurance policy and use that money for financial needs. The third-party buyer will assume payment of the policy premiums and will receive the benefit.
Meanwhile, you take the money to pay for cancer treatments, pay off debts, travel, or check off bucket list items.
One study of 89,520 patients found that those undergoing cancer treatment missed 22.3 more workdays per year than those without cancer. (3) For patients without employment-based benefits, including health insurance, cancer-related healthcare costs often become a financial burden.
Sadly, cancer patients are 2.65 times more likely to file bankruptcy. (4) As a result, bankruptcy is associated with a higher risk of death among cancer patients.
Northwestern Medicine and the University of Michigan examined the long-term effects of a significant financial loss. (5) The study reported that people who lose 75 percent or more of their wealth after age 50 were 50% more likely to die within 20 years than those whose financial picture stayed more stable.
“These people suffer a mental health toll because of the financial loss, as well as pulling back from medical care because they can’t afford it,” says Lindsay Pool, a research assistant professor of preventive medicine at Northwestern. “The most surprising finding was that having wealth and losing it is almost as bad for your life expectancy as never having wealth.”
Covering out-of-pocket expenses
Out-of-pocket costs are common financial hardship. These are the expenses a patient pays directly – co-insurance, deductibles, co-payments – for medications, hospital stays, outpatient visits, and other medical care.
These out-of-pocket expenses for cancer treatments can quickly diminish and often exceed the money in the bank. You could even lose assets. The National Cancer Institute says between 33-80% of cancer survivors use savings to cover the costs of medical care. For many, this results in medical debt, which may have a long-term effect on your credit and retirement savings. (6)
Financial toxicity goes well beyond the dollars and cents impact. There also is personal stress – the angst and anxiety of financial worry, which could lead to depression. (7)
“It’s unfortunate, in this country, that today we’re still struggling with ‘How are we going to pay for health care,’” Page says. “When someone is diagnosed with cancer or a serious illness, one of the two questions they have is they want to find the best doctors. Secondly, how are they going to find the funds to pay for it.”
“LifeGuide Partners offers a free policy appraisal,” he adds. “We can tell you what your policy is worth and convert it to cash today. That will remove their premium payments and help them receive the money they need to pay for care.”
- Five years of cancer drug approvals: Innovation, efficacy, and costs. JAMA Oncol. 2015;1(4):539-540. https://jamanetwork.com/journals/jamaoncology/fullarticle/2212206
- High Cost of Cancer Treatment. https://www.asbestos.com/featured-stories/high-cost-of-cancer-treatment/
- The personal financial burden of cancer for the working-aged population. Am J Manag Care. 2009;15(11):801-806. https://pubmed.ncbi.nlm.nih.gov/19895184/
- Washington State cancer patients found to be at greater risk for bankruptcy than people without a cancer diagnosis. Health Aff (Millwood). 2013;32(6):1143-1152. https://pubmed.ncbi.nlm.nih.gov/23676531/
- Association of a Negative Wealth Shock With All-Cause Mortality in Middle-aged and Older Adults in the United States. https://jamanetwork.com/journals/jama/fullarticle/2677445
- National Cancer Institute. Financial toxicity and cancer treatment (PDQ)–health professional version. https://www.cancer.gov/about-cancer/managing-care/track-care-costs/financial-toxicity-hp-pdq (Accessed: July 14, 2020)
- Financial toxicity and implications for cancer care in the era of molecular and immune therapies. Ann Transl Med. May 2018. http://atm.amegroups.com/article/view/19114/html (Accessed: July 14, 2020)