Cancer insurance

People experience any number fears around a possible diagnosis of cancer, but insolvency isn’t usually one of them.

But as many current and former patients know, the financial toll from taking time off work for treatment, paying for drugs not covered by public insurance or travelling to seek care can quickly add up. And that means financial stress can even overshadow health concerns for many who have received a life-altering diagnosis.

Insurance companies are now rushing to fill that gap by offering consumers the chance to purchase peace of mind in the event of a cancer diagnosis. But there is also growing debate as to whether a cancer insurance policy offers true protection, or if it is a cleverly disguised cash grab that lures customers by playing to their fears.

Cancer insurance offers lump-sum payments, money in the event of surgery or hospitalization and other payouts to offset the cost of dealing with treatment. BMO Insurance, for instance, is currently marketing a product called Well Woman, which provides a maximum payout of $50,000 to women diagnosed with cancer of the ovaries, cervix, breasts, fallopian tubes, uterus, vagina or vulva. The money can be used for anything, from travelling to see a medical specialist to taking a dream family vacation.

While Well Woman has been around for nearly a decade, BMO has recently renewed the marketing push. And it has been getting a big response from customers, said Rocco Casullo, head of direct-to-consumer insurance at BMO Insurance.

Similarly, IA Excellence, a Quebec-based insurer, offers Cancer Guard, insurance against potentially life-threatening cancers. Broadly, these policies are part of a growing segment of the larger critical-illness insurance market, which offers financial protection in the event of medical issues such as heart attack, stroke or bypass surgery. In many cases, consumers will get their premiums back if they remain cancer- or disease-free for the life of the policy, or by the time they reach a certain age, often 70.

The pitch is often irresistible because it appears to allay our fears with a handy solution, said Glenn Cooke, president of Life Insurance Canada.com Inc. Yet some experts warn that various forms of critical-illness coverage are unnecessary and could even prevent people from getting proper long-term disability coverage.

«[Critical illness insurance] is being sold on rainbows and unicorns,» Cooke said. «You should be buying insurance for financial reasons, not for emotional reasons.»

Cooke argues that adequate life and disability insurance is enough to cover unexpected events, and that the payouts from critical illness and cancer insurance – often in the range of $25,000 to $200,000 – are actually quite small, considering the enormous costs that can accompany a disease diagnosis. It isn’t enough for a person to live on for a long period of time, argues Cooke.

It’s not clear what benefit critical-illness insurance offers customers, says Christopher McCabe, Capital Health chair in emergency medicine research and adjunct professor in the economics department at the University of Alberta. For instance, a female who purchases the Well Woman insurance might believe it would cover the cost of any out-of-pocket expenses related to cancer treatment. In reality, «it won’t go very far,» McCabe said, noting that a number of modern cancer drugs cost well in excess of $50,000.

And if an individual does get diagnosed with cancer or suffer another disease covered by the policy, there’s a chance the claim will be rejected because of the terms, restrictions and definitions set out in the policy. Cooke says he has heard that many claims are rejected because an individual’s heart attack didn’t match the specific terms set out in the policy, for instance.

The growing interest in cancer and critical-illness insurance highlights the serious funding gap that forces many patients into a financial hole, said Lauren Dobson-Hughes, senior manager of public issues with the Canadian Cancer Society. And private insurance is clearly not going to solve that problem for everyone.

«Private insurance is fantastic for people who can afford it,» said Dobson-Hughes, but she added: «It means you’re saying only those who can afford to buy the care can access it.»
Cancer insurance is a type of supplemental health insurance that is meant to manage the risks associated with the cancer disease and its numerous manifestations. Cancer insurance is relatively new trend within the insurance industry at large. It is meant to mitigate the costs of cancer treatment and provide policyholders with a degree of financial support. This support is based upon the terms written into a particular policy by an insurance company. As with other forms of insurance, cancer insurance is subject to charges, called premiums, which change depending on the risk associated with covering the disease.
History
In terms of the insurance industry, cancer insurance is novel form of coverage, having emerged approximately 50 years ago. This coverage was created by insurers like the American Heritage Life Insurance Company and Aflac to meet demand coming from those suffering from the disease. Cancer insurance was not designed to replace conventional health insurance coverage. Instead, this type of insurance is meant to augment conventional policies by providing coverage for a disease that is often associated with high out-of-pocket medical costs, even when coverage is provided through traditional insurance policies.

Coverage benefits
Cancer insurance policies typically offer wellness benefits (varies from state to state) that are meant to help those suffering from cancer or at risk of developing the disease adopt healthier lifestyles. These benefits vary depending on the insurance company providing coverage. These benefits can offer financial support for those pursuing healthy living programs, such as tobacco cessation, gym memberships, and dietary changes. Insurers may also offer access to information regarding healthy lifestyles, which policyholders are able to acquire at any time. Typical coverage benefits also provide policyholders with access to wellness tests that are meant for early detection of disease and monitoring other aspects of overall health. These tests include mammograms, Pap smear tests, and colonoscopies as well as many others. In many cases, those with cancer insurance must submit proof that they have received an exam to their cancer insurance provider. This matter is typically handled by the medical professional conducting the exam. Once the evidence of the exam has been submitted and verified, the insurance company will then provide the necessary financial support. As a supplement to traditional health insurance policies, cancer insurance and its associated benefits, are limited in scope. The benefits associated with these policies are often designed to mitigate the effects of cancer or encourage the prevention of the disease as a whole. Benefits come in different varieties depending upon the insurance company underwriting the policies. Many policies offer benefits concerning medical expenses, which include costs associated with health care, such as cancer treatment. Other policies offer benefits concerning non-medical costs. These benefits provide policyholders with financial assistance for transportation, food, home and child care, and certain bills.

Coverage limitations
Limited coverage of skin cancers
Skin cancer is the most commonly diagnosed form of cancer. The primary categories of skin cancer are basal-cell carcinoma (BCC), squamous-cell carcinoma (SCC), and melanoma. The first two, collectively known as non-melanoma skin cancers (NMSC), are highly unlikely to metastasize[1] and comprise the majority of skin cancer diagnoses.[2]

Many cancer insurance plans do not offer benefits for policyholders diagnosed with these non-melanoma skin cancers,[3] or a large share of cases that are frequently called cancer. Other plans that provide both initial-diagnosis payments and recurring payments may not provide a lump-sum benefit for the initial diagnosis of a non-melanoma skin cancer.[4]

Limited range of covered illnesses
Some cancer insurance plans cover only those costs associated with cancer itself. Under these plans, costs associated with any non-cancer illness that was directly or indirectly induced or complicated by cancer are not covered.[5] For example, even though lung cancer increases risk of pneumonia, medical costs related to treatment of pneumonia that occurs after a cancer diagnosis would not be covered by a cancer insurance plan.

Other cancer insurance plans may only cover costs that arise after a patient has developed cancer proper. Policyholders do not receive benefits if they are detected with pre-malignant symptoms or other conditions that show the potential for malignancy.[4]

Limitations on outpatient treatment
Some cancer insurance plans only cover costs related to inpatient care, even though some forms of treatment may require outpatient care.[6] Under these plans, cancer treatment given to a patient after they have left a hospital, including radiation and chemotherapy, may not be covered.

Pre-existing conditions
While cancer insurance plans have varying definitions of pre-existing conditions, they generally agree in that they impose restrictions on individuals who have already been diagnosed with cancer at time of enrollment. Some plans may not provide benefits for costs incurred due to a pre-existing condition during the first twelve months of coverage.[5] Other plans may render patients completely ineligible if they have ever been diagnosed with certain forms of cancer, AIDS, or HIV.[3]

Limitations on double coverage
Cancer insurance is a form of supplemental insurance that is meant to cover gaps in a patient’s primary insurance plans, but in some instances, primary insurance plans provide cancer coverage benefits that overlap with those of the supplemental cancer insurance plan. While some cancer insurance plans will pay benefits no matter what the primary insurance plan pays, some primary insurance plans may include a coordination of benefits clause that prohibit double payment.[6] Other cancer insurance plans may stipulate that patients cannot receive double benefits.

Coverage waiting periods
Some cancer insurance plans have provisions that prevent the policyholder from receiving benefits during a period after initial enrollment; this length is frequently thirty days. Some plans stipulate that if a policyholder is diagnosed with cancer in the first thirty days of coverage, their benefits are significantly reduced and coverage will subsequently be terminated.[5]

Concerns regarding coverage
Health insurance eligibility is often subject to the risk management and appraisal practices of insurance companies. Because of the risks posed by serious health issues, such as cancer, companies often take a strong stance against providing new coverage to those with the disease. As such, typical health insurance policies do not offer coverage for cancer. In these cases, supplemental insurance policies, such as those designed to cover cancer specifically, can be useful. In the U.S., changes to health care laws have made it possible for those with pre-existing medical conditions to obtain insurance coverage.The Affordable Care Act, the law which has presented these changes, has required health insurance companies in the country to offer coverage to those suffering from conditions such as cancer. Though the law stipulates that these people must be granted access to health insurance, insurance policies are subject to the whims of the companies that underwrite them. As such, the provisions of these policies can vary dramatically depending on the health insurance company involved. In some cases, insurers design their policies to be financially unattractive to those suffering from costly medical conditions.

As a supplemental health insurance plan, cancer insurance policies are meant to close the gaps left behind by conventional insurance policies. Even so, these plans may not provide coverage for the full extent of health issues related to the disease. Complications concerning the disease can have a tremendous effect on the availability of cancer insurance policies. One of the primary concerns regarding cancer insurance coverage is eligibility. Typically, those with pre-existing medical conditions, such as cancer, are not eligible for the coverage. The factors that determine eligibility vary from insurer to insurer.