We all have insurance for something, health insurance, life insurance, homeowner’s insurance, auto insurance; the list goes on. A growing number of Americans are now getting cancer insurance. Should someone be diagnosed with cancer, the insurance policy will fill those gaps left by many health insurance plans (even for obscure cancer’s like nodular melanoma or linitis plastica) For example, the majority of health insurance policies only cover medical expenses (e.g. surgery, hospital bills, medicine); cancer insurance helps pay for medical expenses not covered and non-medical expenses such as child-care, transportation, lost wages and amplified costs of living. Even extensive health insurance policies have limits, such as annual or lifetime caps, co-payments and deductibles.
One reason to consider cancer insurance is that the side effect of better medical care is a rising cost of treatment. In the January 2011 edition of the Journal of the National Cancer Institute, a study by the National Institute of Health (NIH) estimated that, based on growth and aging of the U.S. population, medical expenditures for cancer in the year 2020 are projected to reach at least $158 billion (excluding the cost of inflation). This amounts to a 27 percent increase over ten years. The NIH study added that new discoveries in the area of diagnostics, treatment and follow up care could push that number as high as $207 billion. Cancer treatment accounts for about 10% of U.S. health expenses.
Not all cancer insurance policies are the same, and policies vary widely with regard to both cost and coverage. A particular insurance plan may not pay for treatment beyond hospital care, cover cancer diagnosed before applying for the plan and/or have a time limit. Another issue to consider is whether an insurance policy covers an illness caused by a cancerous tumor, such as infection or pneumonia. In addition, some insurance policies increase benefits after the claimant has been hospitalized for 90 consecutive days, but as the average hospital stay for a cancer patient is only about 13 days, this costly benefit may not be worth the cost.
One drawback of cancer insurance is that it covers only cancer, as opposed to a major medical policy, which insures against a variety of cataclysmic medical expenses. Major medical policies are more expensive than cancer insurance as they have high maximums, and cover illnesses (including cancer) and accidents. Finally, major medical policies cover a large percentage of incurred costs after the claimant, or the claimant’s basic insurance policy, pays the deductible.
Disclaimer: The material contained in this article represents our best efforts, but is offered for the purposes of education and information only and is not a substitute for obtaining advice from medical, insurance, legal, tax or other qualified adviser.