Insuring against the high costs of cancer

Major medical

These policies cover a large percentage of the medical costs for any accident or sickness, including cancer, once you meet the deductible. "They cost more than cancer policies because they cover more, but they are generally considered a better buy," according to the National Association of Insurance Commissioners.

Critical illness insurance

Popular overseas, critical illness insurance is making headway in the United States by providing supplemental coverage for the top three critical illnesses: cancer, heart attack and stroke. Some policies will pay for all three, for example, if you get cancer in your 50s, a heart attack in your 60s and a stroke in your 70s.

But the top-selling feature of critical insurance? You receive a lump-sum payout upon diagnosis to use as you choose for medical and nonmedical bills. No waiting months for reimbursement.

"The bottom line is, if you get cancer, you need cash," says Jesse Slome, executive director of the American Association for Critical Illness Insurance, or AACII.

The AACII lists the following average annual premiums by age group for a male nonsmoker based on a $40,000 benefit. Age 40: $575 to $610; age 45: $745 to $785; age 50: $940 to $980. Tobacco users can expect to pay roughly double. Rates also may vary depending on your current health and medical history.

Medigap plan

If you qualify for Medicare, most outpatient treatments for cancer are covered 80 percent by Medicare Part B. If you're concerned you won't be able to cover the remaining 20 percent for treatments such as radiation and chemotherapy, the thrifty solution may be to purchase a Medigap supplement that picks up your 20 percent of the bill.

Medigap policies, which are underwritten by private insurance companies, vary widely by company and by how they set their premium rates. Community-rated, or "not-age-related" Medigap policies cost the same regardless of your age, but your premiums may increase with inflation or other factors. You may save money if you buy an "issue-age-rated" Medigap policy, which fixes your premium based on your age when you buy the policy. A third option, an "attained-rated" Medigap policy, offers relatively low premiums for younger buyers that increase as you age.

Canosa sees brighter days ahead for cancer patients, thanks to the Patient Protection and Affordable Care Act. Health care reform not only barred insurers from denying coverage due to pre-existing conditions, it removed the lifetime policy benefit cap that once tossed cancer victims out in the cold.

"You can get to that lifetime cap pretty quickly with cancer," she says. "A lot of policies are capped at $1 million. It doesn't take long to get there."

Should cancer bills storm your insurance walls, CancerCare, the American Cancer Society and many other programs offer grants and loans for cancer patients. A good place to start is the Cancer Financial Assistance Coalition, a searchable database maintained by 14 organizations as a resource for cancer patients in financial need.

"Start this conversation with your health care team," Canosa says. "Often they're linked to resources, including less-expensive options."


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