A cancer diagnosis tests your resilience in many ways. Actor Michael Douglas touches on this when he said, “Cancer did not bring me to my knees. It brought me to my feet.” Fear and apprehension may be the first feelings to set in as you consider the health and lifestyle implications. Those would be challenging enough to manage on their own, if you didn’t also have to deal with the financial side of having cancer. Cancer treatment is expensive — often, too expensive to charge on a credit card or cover out of your emergency fund.
Total cost of treatment before insurance
But, how much does cancer treatment cost, exactly? Assuming you have no health insurance, you could easily spend six figures chemotherapy, surgical procedures, prescription medications, and doctors visits. Some sources estimate a cancer treatment plan involving chemotherapy can range from $100,000 to $300,000. Specific to breast cancer, a mastectomy or lumpectomy alone — often required before chemotherapy begins — can cost $15,000 to $50,000. In terms of average cancer treatment costs, AARP estimates that patients spend about $150,000 in total. Where your costs fall relative to that average depends on the type of cancer you have and your treatment needs.
There are notable differences in treatment costs by type of cancer, according to a report from Milliman Research titled “A Multi-year Look at the Cost Burden of Cancer Care.” The report shares cumulative healthcare spending related to lung, colorectal, and breast cancer in the four years following diagnosis. Lung cancer patients and their insurers had spent a total of $282,147 on cancer-related treatments, colorectal cancer expenses totaled $165,080, and breast cancer treatment plans had the lowest expenses at $101,401.
Out-of-pocket costs
The Milliman report also shares out-of-pocket costs absorbed by cancer patients after insurers had paid their share. These cash expenses vary far less across the different cancer types than total treatment costs do. In the four years following diagnosis, lung cancer patients spent a total of $11,180 of their own money. Colorectal cancer patients spent $8,442, and breast cancer patients spent $7,531. Note that these numbers do not include the cost of patients’ health insurance premiums.
If you have health insurance, your out-of-pocket expenses for your cancer treatments will be heavily influenced by the size of your deductible and the coinsurance rules of your health plan. To get a handle on what your treatment costs might be, schedule a consultation with your insurer. Here are seven questions you should ask.
- What are my copayments for doctor visits?
- Does my plan cover specialists if I’m referred by my doctor?
- What is my deductible?
- Once I meet the deductible, am I responsible for co-insurance? How much is it? Is there an annual cap on my out-of-pocket costs?
- Are there tests, treatments, or prescription drugs not covered by my plan? What are my options if my doctor recommends non-covered services?
- Is there an approval process for treatments or specialists? What is it?
- Who do I call when I have questions? Can I have a single point of contact?
Note that Medicare and Medicaid will cover a portion of your cancer treatment expenses. Medicare may cover 80% of costs associated with prescribed treatments. Medicaid also provides assistance with cancer treatment costs for those who qualify, but you may be limited in the healthcare providers you can see.
You should also discuss your financial concerns with your doctor. You obviously don’t want your treatment plan to be governed by financial constraints, but you do want to take advantage of any simple opportunities to save. An example would be swapping out brand-name drugs for generic ones. Your doctor can help you identify some of those strategies.
How to pay for cancer treatment
Learning more about the potential cost of cancer treatments often prompts other questions. Where can I get financial assistance for cancer patients? Is there such a thing as cancer care financial assistance? Are there organizations that offer help for cancer patients to pay bills? There are actually several sources that can help you pay for the cost of care and even some of your living expenses. Some of those sources come from your own balance sheet, but we’ve also included five places to find grants, awards, and free services. If your treatment plan is extensive or you don’t currently have health insurance, consider combining more than one of these to get the assistance you need.
1. Health insurance
Thanks to the Affordable Care Act, you cannot be denied health insurance because you’ve been diagnosed with cancer. If you don’t have health insurance today, visit the Healthcare.gov marketplace to determine if you can get coverage quickly. Most applicants are subject to an open enrollment period, which is usually November to mid-December. If you’ve recently changed jobs (or lost your job), had a baby, or qualified for Medicaid, you may be allowed a special enrollment period.
Note that high-deductible plans are the norm these days, and often because it’s the only option with affordable premiums. A deductible of several thousand dollars may seem insurmountable, but even that is better than having no health coverage at all.
2. Payment plan
You can ask your provider about a payment plan for your more expensive treatments. Try having this conversation early on in the process, before you start receiving bills you cannot pay. That will be less stressful for you, as you can hopefully bypass aggressive calls from collection agencies.
3. Home equity
If you have equity in your home, you can liquidate it to cover the cost of your care. Your options include a home equity loan or line of credit, which both require monthly payments, or a reverse mortgage, which does not. A home equity loan is a second mortgage with a fixed repayment schedule. You’d borrow a lump sum amount and repay it over five to 30 years, as specified in your loan agreement. Home equity lines of credit are more flexible and often allow for interest-only payments. The advantage here is that your credit line may be structured to allow for borrowing as needed — rather than having to take a single distribution all at once.
A reverse mortgage is an option if you are 62 or older. This is an advance against your home equity. You can continue to live in the home, but if you die, sell the home, or move out, the loan becomes due and payable. Normally, that means the home is sold and your lender takes its cut from the proceeds.
4. Life insurance
Life insurance can be another source of money for cancer patients. There are usually three ways to tap into the value of your life insurance. You can borrow against the policy’s accumulated cash value, you may be able to withdraw funds directly, or you can sell your policy outright in a life settlement or viatical settlement. Life insurance loans tend to carry competitive interest rates and lax repayment schedules. If you don’t repay the loan, the balance is usually deducted later from the death benefit payout.
Selling your life insurance through a life settlement or viatical settlement would normally generate the highest cash proceeds of these options — even more than you’d get from surrendering your policy. A life settlement may be an option if you are 65 or older and have an expected lifespan of more than two years. Viatical settlements are specifically for insureds who have a terminal or chronic diagnosis and are expected to pass within 24 months.
When you sell your insurance, you are transferring the policy, its cash value, and its death benefit to a third-party buyer in exchange for a single cash payment. There are no restrictions on how you use the cash, though you may owe taxes on a portion of the proceeds. Once the transaction is complete, you are no longer responsible for the policy’s premium.
5. Retirement accounts
If you have an IRA or a 401(k), you may be able to take a hardship withdrawal or loan from your retirement savings. Hardship withdrawals can be expensive. Normally, you would pay a 10% penalty plus income tax on any amount withdrawn. Borrowing from your retirement account may be a better option if you’d prefer to avoid the tax consequences. Normally, the limit on borrowing is 50% of your balance, up to $50,000.
6. Asset sale
Anything you own can be sold, including cars, furniture, real estate, and financial investments. Consult with your financial advisor on the tax implications of selling big-ticket items, though. You don’t want to raise just enough cash to cover your medical bills and then find out you owe 20% to the IRS.
7. Agencies that provide financial assistance for cancer patients
When your assets have run dry, a charitable organization might help you get the treatment you need. Try these five sources to start.
- CancerCare provides a range of services, including case management, counseling, workshops, and financial support for cancer patients. The organization has provided nearly $40 million to roughly 25,000 people to help cover copayments, travel expenses, and childcare expenses related to cancer treatment plans. Notably, CancerCare has a copayment assistance program that offers same-day approvals by phone. View the covered diagnoses here.
- Cancer Financial Assistance Coalition (CFAC) is a group of organizations that provide financial help for cancer patients. Assistance is available for healthcare-related costs like copayments and medical equipment. Member organizations may also offer help for cancer patients to pay bills — including costs related housing, utilities, and transportation.
- The Samfund provides assistance to young adult cancer patients for living expenses and healthcare costs.
- Jill’s Wish offers $1,500 grants to breast cancer patients, specifically for non-medical living expenses. The organization pays the funds directly to your lender, landlord, utility company, or auto lender.
- You can also check with the American Cancer Society to find church-based or community-based organizations in your town that offer financial assistance or emotional support for patients and their families. Help for cancer patients’ families often comes in the form of support groups or programs that supply meals.
Stand up to cancer
Cancer treatment plans can cost $10,000 or more out-of-pocket if you have health insurance — and 20 times that if you don’t. If you don’t have any cash sitting around, take stock of your finances and make a list of assets you can sell or borrow against. The big ones are life insurance, home equity, and your retirement accounts. You can also reach out to one of several charitable organizations to see if you qualify for a grant or award. Most importantly though, get the treatment you need. The financial consequences of a cancer diagnosis are secondary to the health outcomes; you can always deal with a messy financial situation once you’re fully recovered.
