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How to Choose a Health Insurance Plan If You Have Cancer

Whether you are a cancer survivor, a family member of a person who has cancer, or are simply investigating the health insurance plan options that are available to you, it is important to understand the financial resources required for a health plan and what makes some better than others. Nobody wants to think that they are going to get sick, but having a health insurance plan means that you have a safety net in case you do. In the face of rising cancer costs as well as the costs for all types of medical care, it is essential that you do your research so that you fully understand the different types of plans, what they offer and what you must pay.

You Need Insurance to Help with Cancer Bills

When a patient is first told that they have cancer, the cost of the disease is usually low down on their list of things to think about. Unfortunately, the reality of today’s medical costs will force you to make it a priority pretty quickly – in fact, the doctor’s office may ask you to sit down and discuss whether you will need help with cancer bills before you have even identified a cancer treatment protocol. Though historically many Americans did not have health insurance at all, the Affordable Care Act was designed to encourage more robust enrollment by providing more affordable rates, and ensures that most of the health insurance plans available provide coverage for cancer. Private health insurance options include:

  • Group health plans that are generally offered to employees of a company, as well as their dependents
  • Individual health plans that are sold directly to a person, and which may also cover family members or dependents

All health insurance plans sold to individuals and small businesses are required to cover certain essential health benefits, but some older plans may not provide those items. It is important to check to see what coverage is provided before settling on a plan.

Health Insurance Plan Costs

One of the most important and obvious considerations when choosing a health insurance plan is the cost involved. It is essential that you make a decision based not only on the premium that you pay to have the insurance in place in case of need, but also on what you will end up paying as your portion of the cost of care. These costs beyond the premium can include copays, coinsurance and deductibles.

How Does Health Insurance Work?

Let’s take a look at the following example*.

Imagine you need a $100,000 surgery as part of your cancer treatment, which we’ll assume is a covered medical expense under your health insurance plan.  Let’s say this health insurance plan has a $1,000 annual deductible, 20% coinsurance after deductible, and $5,000 out-of-pocket maximum, and an office visit co-pay of $30 per visit.  How do you determine your costs?

DEDUCTIBLE: Typically, a deductible is the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses. In this example, your $100,000 surgery needed as part of your cancer treatment plan would make you responsible for paying the first $1,000.  After the $1,000 deductible is met, the coinsurance part of your plan would kick in.

COINSURANCE: Coinsurance is a cost-sharing requirement where you are responsible for paying a certain percentage and the insurance company will pay the remaining percentage of the covered medical expenses after your deductible is met. Using this example, the insurance company would pay 80% of the bills and you would be responsible for paying the remaining 20% until your maximum out-of-pocket limit is reached.

MAXIMUM OUT-OF-POCKET LIMIT: The maximum out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. In this example, your maximum out-of-pocket limit is $5,000.  So, let’s break this down. With a $5,000 maximum out-of-pocket limit, you will pay a $1,000 deductible and $4,000 coinsurance while the insurance company covers the remaining $95,000 of the surgery for your cancer treatment.  Even if you are hospitalized again in the same year, the insurance company will pay 100% of your covered expenses.

This is enough to make your head spin without dealing with your cancer diagnosis.  Add that into the mix and it can be a lot of stress on an individual.

What Type Of Cancer Coverage Does The Health Insurance Plan Provide

Perhaps the most frustrating aspect of selecting a health insurance plan lies in finding that one that works for your budget may not provide for your medical needs. Every health insurance plan is different, and not all cancer treatments are covered. Similarly, not all cancer medications are covered, and if you are a cancer survivor who is concerned that your cancer may come back, or someone who is currently living with cancer, you want to be sure that the coverage you choose will provide for your needs. Some cancer medications can cost upwards of $100,000 per year, and if your health insurance plan excludes payments for the drug that your physician says is essential for your survival, you may be left having paid for an expensive policy while still wondering how to pay for cancer treatment.

Questions to Ask Your Health Insurance Provider About Coverage for Cancer Treatments & Medications

  1. Is there a difference in coverage for physicians and/or cancer treatments that are considered “in-network” versus “out-of-network?” (Be sure to check if you health insurance plan has a network of physicians or cancer treatment centers.)
  2. Exactly what cancer treatment costs are covered (oncology office visits, blood tests, surgery, radiology exams, chemotherapy, radiation etc.)? How much of each treatment is covered? Are there co-payments or deductibles?
  3. As bills start to add up, what is the process for payment or reimbursement? Do I need to pay out-of-pocket first and get reimbursed? How long does it take to get reimbursed?
  4. What is my prescription drug coverage? Is there a limit for this coverage? Is it likely my drug costs will reach that cap (if you already know which drugs you will be taking)?  Do you have a list of cancer drugs that are covered with my prescription drug plan?
  5. What happens after I reach the limit on my prescription drugs? How much is my co-pay (co-payment) for prescription drugs?
  6. When I need to stay overnight in the hospital for cancer treatments, what costs are covered? Which costs are not covered?
  7. How are emergency hospital visits handled? What is the coverage for an emergency room visit? Do I need to get a pre-approved for the emergency visit?
  8. Are second and third opinions covered?  What if the second opinion is for a physician that is “out-of-network?” Are there any additional steps that I need to take in order to get a second opinion?
  9. Are any integrative and complementary therapies, such as acupuncture, covered?
  10. When considering a clinical trial, which costs will be covered by my health insurance plan? Do I need to get pre-approval for joining a clinical trial?

Find Additional Financial Resources to Pay for Cancer Treatments & Bills

Cancer costs and bills can quickly become insurmountable. In addition to hospitalizations, diagnostics, treatments and medications, there are the additional costs that you may face, including transportation, lost wages, home care, and more. This is one of the reasons that the majority of those who file for bankruptcy do so in large part as a result of cancer bills and expenses. Though people purchase health insurance believing that it will provide them with the protection they need, all too often cancer patients need to come up with additional financial resources to how to pay for cancer treatment. In many cases, taking out a life insurance loan offers the best solution.

*Disclaimer: The example in this post is only for illustration purposes only. You should seek out a health insurance professional or contact your health insurance company to find out more information on your specific health insurance plan.

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