Surviving Cancer's Financial Side Effects
According to a recent study, almost half of the more than 1 million U.S. bankruptcy filings within the past year were due at least in part to major medical bills or other financial consequences of illness or injury.
Surprisingly, a lack of medical insurance was not a factor in these filings. Rather, according to study author Elizabeth Warren of the Harvard Law School, "under-insurance" was the culprit. Families simply did not have enough medical insurance to cover catastrophic medical costs, or their coverage didn't have provisions to offset other financial implications of the illness, such as lost income.
Warren and her colleagues, Teresa Sullivan of the University of Texas and lawyer Melissa Jacoby, surveyed bankruptcy filers in eight judicial circuits around the country, accounting for about 18 percent of all filers. They noted that their findings illustrate just how fragile middle-class status is for many American families who are "just one serious illness away from financial collapse."
Other studies have backed up their findings. "In the overwhelming majority of cases, the person filing for bankruptcy experienced some economic catastrophe within the 12 to 24 months prior," concurred William Binzel of MasterCard International, as quoted in the Washington Post.
Another study published in the Annals of Internal Medicine found that 28 percent of those patients with the highest medical needs spent at least 10 percent of their household income on healthcare. More than 16 percent of "high-need patients" reported that they or a family member had to take out a loan or mortgage, spend savings, or take an additional job to finance the illness.
Lead author Dr. Ezekiel Emanuel of the National Institutes of Health wrote that just the last year alone of a terminal illness could cost a family more than $30,000 above any medical insurance coverage they may have. One consequent side effect, he noted, is an increased incidence of depression in caregivers and suicidal thoughts in the patients.
A recent special series of articles from the web site cancerpage.com focused on many of the financial issues surrounding cancer treatment and recovery. If offered the following recommendations for maintaining some semblance of financial stability during this incredibly stressful period:
Health Insurance. A study published in the June 2000 issue of the American Journal of Public Health found that one in four Americans are confused about the exact type of medical plan they have. And their specific type of coverage can have huge financial implications for a protracted illness such as cancer. Fee-for-service? Managed care? HMO, PPO, POS? It can be incredibly confusing, but incredibly important to fully understand the coverage you have in place.
Disability Income. While most people with cancer will not qualify for disability insurance that requires a medical exam, there are group disability policies available that do not require medical exams or questionnaires, although they may have a waiting period until coverage starts. A limited type of disability insurance is also available from some credit card companies. It usually has a maximum amount that it will pay each month for a limited time, but that could be when you need help the most.
Medicare and Medicaid. Medicare is the primary source of health insurance in the United States for the elderly and the disabled. Medicare doesn't cover everything, nor does it cover 100 percent of an individual's medical bills. However, once minimum requirements are met, an eligible person cannot be refused coverage for pre-existing conditions, and there is no lifetime maximum for benefits. Medicaid, on the other hand, is a need-based program that will only pay the expenses of those who meet low-income and asset tests. The rules for Medicare and Medicaid can get confusing at times, but that should not deter you. They are simply too important.
Home Equity. If you own a home and have available equity in it, you may be living in a source of ready emergency cash. A number of options are available to you, including mortgage refinancing and home equity loans. Another option, a reverse mortgage, involves a lender actually making payments to you until either the sale of the home or the death of the homeowner, at which time they will be repaid. However, because your home is at stake, make sure you explore these options thoughtfully.
Social Security. Two Social Security benefit programs may not only provide cash for medical expenses but may also open the doors to Medicare and Medicaid coverage for those who qualify. Social Security Disability Insurance and Supplemental Security Income can provide important coverage and income, but their qualifying rules are strict. You may want to consider getting professional financial or legal help before applying.
Financial Planning. The services of a financial planner are not only for the rich. A good planner can craft a solid, workable financial strategy that will prioritize expenses, coordinate payment plans, and recommend using assets in the most fiscally sound manner. You may also want to consider a program offered by The American Cancer Society called "Taking Charge of Money Matters," which includes workshops on many of the financial issues facing families with cancer.
Bankruptcy. Sometimes the medical expenses, loss of income and other financial factors can become overwhelming, and bankruptcy may be a last but necessary resort. Take caution, however. There are different types of bankruptcy filings, and while they can reduce or eliminate current debts, any new medical and other debts will not be covered. And the filing remains on your credit report for 7 to 10 years. Bankruptcy law is a complex field and the services of a qualified bankruptcy attorney will be invaluable.
SOURCES:
The Washington Post, April 25, 2000
Annals of Internal Medicine, March 2000; 132:451-459
American Journal of Public Health, June 2000; 90:924-992
The American Cancer Society (http://www.cancer.org)
cancerpage.com (http://www.cancerpage.com)
[Table of Contents] [Archived Issues / Search] [The Breast Center]