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Financial Support

Avoiding the Financial Toxicity of Cancer

Duane Cross tackles the financial aspects of cancer, from out-of-pocket expenses to life insurance policies, focusing on financial toxicity and how to deal with it.
April 2021 Vol 7 No 2
Duane Cross
Lynchburg, Tennessee

The cumulative cost of cancer treatment can be overwhelming. From testing to medications, financial stress can quickly build up. Regardless of whether you have health insurance or not to cover your cancer treatment, you will most likely have out-of-pocket expenses.

Reasons for Paying More

A study by the Duke Clinical Research Institute showed that patients with cancer who have insurance have significant costs as a part of their cancer experience.1 They are paying more for their cancer care than other patients, because1:

  • Cancer treatment is very expensive
  • Expensive cancer therapies are overused, even when cheaper alternatives are available
  • The rising costs of care are passed on to the patient.

However, not all patients with cancer have the same financial burden. Sociodemographic characteristics—including the type of insurance, the patient’s race, marital status, education, geographic location, and additional medical conditions—all contribute to the higher out-of-pocket costs for many patients.

As the medical bills stack up, many patients with cancer are devastated by the cost of their treatment. If your health insurance policy covers your treatment, you will still have copays, co-insurance, and pre-deductible expenses. Tack on travel, lodging, food, rehabilitation, and in-home care, and it’s easy to understand how emotional and physical stress can be devastating.

Financial Toxicity

Financial toxicity is defined as the problems a patient has in relation to the cost of their medical care. This economic hardship—the costs for medical care that are not covered by health insurance—can lead to debt and even bankruptcy. Some patients with cancer even choose not to see a doctor or not take their prescription medicine, which then affects their quality of life and can affect survival.

Financial distress also affects patients’ well-being and quality of care.2 Insured patients who are seeking copay assistance have considerable financial burden. They may alter their care to reduce their expenses, and even with health insurance, patients often face financial distress and inability to access care (or health disparities).

Your Life Insurance Policy

Many patients and their families rely on savings, take out loans, use credit cards, or use fundraising platforms to help offset the cost of their cancer treatment. Often overlooked, however, is an asset many patients likely have in their financial portfolio: a life insurance policy.

“I had stage IV colorectal cancer and was suffering from the stress of finances, the stress of a life-threatening disease,” said Mary D. “I was consumed with dread and worry. I had never been hospitalized. I was not taking daily medications. It had been probably 20 years since I’d had the flu. I was in good health.”

“When I was sick and trying to deal with not seeing a financial future, I accepted that cancer would kill me,” she said. “Cancer took a mental toll on me. It was gut-wrenching.”

As a business owner and entrepreneur, Mary was consumed with meeting the financial obligations she had with clients. She and her husband were diligent with their savings. Still, they knew the cancer diagnosis would affect their business and lifestyle.

“I was diagnosed in early 2019,” she said. “I worried we would be destitute. My attorney asked about life insurance as a way to pay for my treatment. I’d taken out a life insurance policy as part of our estate planning. I wasn’t even thinking about the policy, and when he mentioned it, I was just floored—‘my God, that’s right!’”

“We jumped right in and made it happen. I sold the life insurance policy, and it took an enormous amount of stress off me.”

Wm. Scott Page

Utilize your asset: Insurance Companies’ Dirty Little Secret

Wm. Scott Page, CEO of LifeGuide Partners (www.lifeguidepartners.com) in Atlanta, Georgia, has assisted people facing complex financial issues for more than 30 years. He says that a life insurance policy is a valuable asset, recommending that everyone should request a free review and appraisal of his or her life insurance (as described below) before letting a policy lapse or canceling it.

“People have been selling their existing life insurance policies for years,” Mr. Page noted. “Approximately 85% of all life insurance policies are lapsed or canceled and never pay out the benefit to the consumer. It’s the insurance companies’ dirty little secret to how they remain so profitable,” he added.

“They hope consumers never learn about this option, so the policyholders are locked into paying increasingly expensive premiums until they can no longer afford to keep the coverage. It’s been our mission to change that greedy trend, by educating consumers about every option available under the law to improve their quality of life,” Mr. Page emphasized.

How To Cash In Your Life Insurance

State regulations protect more than 90% of insured Americans who are pursuing the sale of their life insurance policies. (Many states use the National Association of Insurance Commissioners’ law.) The process to convert a life insurance policy into cash is straightforward and includes several easy steps:

  1. Getting an appraisal of your case. Get an appraisal of your medical situation, as well as of your life insurance policy, to determine how much money you may be eligible to receive. Remember, after you sell your policy, you no longer pay the policy’s premiums; the new policy owner is responsible for all future premiums.
  2. Receiving a formal offer. A licensed and regulated buyer will present you with a formal purchase agreement and answer any remaining questions you may have. The amount offered for your policy is contingent on the buyer’s perceived value of your policy, and the insured’s life expectancy.
  3. Making the right decision. You should accept or reject the offer based on your circumstances. When you accept the offer to sell your policy, in exchange for the transfer of the policy ownership and rights, you receive a lump sum of money from the new owner of the policy. If you reject the offer, nothing changes; you still own the life insurance policy and continue to pay the premiums.

Rising Cancer Treatment Costs

For patients with cancer, the money from their life insurance can offset the potential economic burden of financial toxicity as the price of new therapies and drug-based adjuvant treatments continue to rise. In 2018, the President’s Cancer Panel reported that most cancer drugs released between 2009 and 2014 were more than $100,000 per patient for 1 year of treatment.3 Moreover, although cancer treatment costs increased by about 60% for insured patients between 2004 and 2014, spending on the new immunotherapies available today for many types of cancer grew by up to 485%, according to the National Cancer Institute.

Ten years ago, the National Cancer Institute projected that if costs of care increase by 2% annually, the total expenditure in 2020 would be $173 billion—a 39% increase from 2010. In 2020, the American Cancer Society Cancer Action Network issued a new report, showing that in 2018, patients with cancer in the United States paid $5.6 billion out of pocket for cancer treatments, including surgical procedures, radiation treatments, and chemotherapy drugs.4 The report also showed that financial hardship caused by cancer disproportionally affect black people, those with low incomes or those with low education.4

Given the population growth, the costs for advancing technologies and treatments, as well as the rising incidence of some types of cancer, the likelihood of financial toxicity will continue to escalate. Still, if you face potentially insurmountable out-of-pocket expenses, there are feasible options to address the economic distress.

“My life insurance policy, it was the key to unraveling the damage—the worry, the stress,” Mary said. “It saved my life. Quite frankly, I should not be here, but here I am.”

Financial Toxicity

Causes

  • Increased costs of care:
    • Hospital costs
    • Transportation costs
    • Lodging costs
    • Cancer drug costs
  • Lack of health insurance, loss of insurance coverage, or rising costs of insurance
  • Reduced income:
    • Loss of employment
    • Reduced efficiency

Consequences

  • Risk of bankruptcy
  • Decreased satisfaction with care
  • Skipping or delaying lifesaving medical care
  • Poor quality of life
  • Reduced survival

Key Points

  • The type of insurance, the patient’s race, marital status, education, geographic location, and additional medical conditions all contribute to higher costs for many patients
  • If you face high out-of-pocket expenses, you have options to address this
  • State regulations protect more than 90% of insured people who are pursuing the sale of their life insurance policies
  • Converting a life insurance policy into cash includes getting appraisal of your policy’s value, receiving a formal offer from a buyer, and making the right decision for you

References

  1. Zafar SY, Abernethy AP. Financial toxicity, part I: a new name for a growing problem. Oncology (Williston Park). 2013;27(2):80-81. www.ncbi.nlm.nih.gov/pmc/articles/PMC4523887/.
  2. Hanratty B, Holland P, Jacoby A, Whitehead M. Financial stress and strain associated with terminal cancer—a review of the evidence. Palliative Medicine. 2007;21(7):595-607. https://journals.sagepub.com/doi/pdf/10.1177/0269216307082476.
  3. President’s Cancer Panel. Part 1: the rising cost of cancer drugs: impact on patients and society. In: Promoting Value, Affordability, and Innovation in Cancer Drug Treatment. March 2018. https://prescancerpanel.cancer.gov/report/drugvalue/Part1.html.
  4. American Cancer Society Cancer Action Network. How much does cancer cost? New report adds up the financial burden of a cancer diagnosis. October 22, 2020. www.fightcancer.org/releases/how-much-does-cancer-cost-new-report-adds-financial-burden-cancer-diagnosis.

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