According to the Centers for Disease Control and Prevention, each year 12.7 million are diagnosed with cancer and 7.6 million people die from the disease worldwide.

Cancer can be devastating, not only to the mind and body but to your finances, too: A 2007 study by researchers at Harvard University found that medical expenses were responsible for 62 percent of personal bankruptcies in this country. Surprisingly, 78 percent of those who filed for bankruptcy had medical insurance at the start of their illness, including over 60 percent who had private coverage, not Medicare or Medicaid.

High medical bills caused most of the medically related bankruptcies. In some cases, families were forced to mortgage their homes; others went into bankruptcy because a medical condition resulted in lost income. Hospital bills, prescription drugs, and physical therapy were among the services not covered by medical insurance in those surveyed.

Cancer Insurance: The Bottom Line

Statistically there's a better chance of getting diagnosed with cancer than of dying in a car accident or house fire, and Michael Hensh, an independent agent and district sales coordinator representing Aflac American Family Life Assurance Company, says cancer insurance is one way to avoid financial ruin: "Medical insurance is designed to pay doctors and hospitals. It was never intended to keep you financially sound," he explains.

"I sell cancer policies that provide a sizable cash benefit," says the agent, who handled several large cancer claims with an average pay out of $30,000 last year alone. "Once the patient has been diagnosed, they can use the benefit anyway the like. A small business owner I worked with used his insurance money to stay afloat while he was undergoing treatment and missing work."

Experts at the American Cancer Society say no health plan has benefits that cover all the costs of cancer treatment and few families know exactly what their insurance or managed care plans provide. "The reality is there's a lot not covered by medical insurance-even for a major illness like cancer," Hensh says, adding that consumers are often surprised that in many cases, tests and medication are considered out-of-pocket costs. High deductibles and co-payments can add up, too. This can further endanger patients' health, since "Cancer patients have been known to avoid tests they need and take half doses of medication so it lasts longer."

Patients should also think about experimental treatments when considering medical expenses: Hensh says they are not normally covered by medical insurance. "Non-traditional treatments have been responsible for curing many cases of cancer, yet they typically aren't covered by medical insurance," explains the New Jersey-based agent. "I've sold policies to many grateful people who've used the cash to help enable such treatments."

Health Care Reform and Cancer

Beginning in October 2013, the establishment of a new insurance marketplace will enable key parts of the Affordable Care Act to be implemented in 2014. Insurers and analysts say the role of federal subsidies still seems unclear but some experts believe an increased number of consumers will receive more generous plans as a result of the new law. While the effects of the law will vary widely, they are generally expected to affect individuals and small businesses more than large companies. By most measures consumers over the age of 65 are also expected to benefit.

One major change under the Affordable Care Act is that states are now required to have a pre-existing condition insurance plan or to establish a high-risk pool to cover people who have not had insurance for six months or more and have cancer or another pre-existing condition. For more information, visit: Note: Read information carefully when comparing policies. State-supported plans may cost more than some individual insurance plans.

Regardless of changes brought on by the new law, the need for cancer insurance will not end, and Hensh advises buying it before receiving an unfortunate diagnosis-especially if there's a history of cancer in your family. "I usually recommend buying a supplemental policy in your 30s and 40s," says the agent. "Cancer insurance is more affordable than many people think—costing on average $5 per week for an individual."

Putting off buying cancer insurance can be a costly mistake, since many companies won't sell it to you after you have received a diagnosis, or have long waiting periods. "Compare policies and be sure to ask about age-related costs," Hensh advises. "Read the language carefully. Some policies will pay more per day for hospital stays ($350 vs. $300, for example), but that may only apply to concurrent hospitals stays [those that occur at the same time]. If you are sent home, but end up being readmitted a few days or weeks later, the subsequent hospital stay may not be covered." In addition, since treatments like chemotherapy and radiation are usually outpatient procedures, regular medical insurance might not cover hospital costs associated with these procedures.

Helpful Information for Patients

To assist consumers with changes brought on by the new law, the government has launched, intended to be a one-stop shopping venue for insurance. The website has details on over 4,400 plans from more than 225 insurers, and the information is updated monthly. A video with advice on finding insurance plans can also be found there.

People who are eligible for Medicare (over the age of 65) or Medicaid (low-income), may want to visit for more information about how those programs will be affected by health care reform.

Enlisting the help of a trusted insurance agent can help you make right decision for your circumstances.

Michael Hensh reviewed this article.

Not totally convinced? Read about the case against cancer insurance here.



Interview with Michael Hensh, independent agent representing Aflac American Family Life Assurance Company.