Cancer and the associated debt after cancer sucks. It’s a devastating disease for young and old, devastating to families, and devastating to the futures of patients and their families. Oncology drugs (chemotherapy), radiation, and other treatments don’t literally cost the earth, but an average year of treatment runs $150,000 per year, with as much as two-thirds of that expense spent on cancer-fighting drugs alone. Cancer patients are more likely to declare bankruptcy from debt after cancer as a result of their illness, and 80 percent of them are more likely to die of their illness afterwards.
The American health insurance system is largely run by for-profit companies. These companies have worked with employers as far back as 1983 to gradually shift more of the cost of healthcare onto those they cover. While they are no longer allowed to discontinue coverage if you are ill – as long as you pay the premiums – nor are they allowed to deny coverage based on a pre-existing condition. However, high deductible insurance plans are often the most affordable, but cover the least amount of expenses and the deductible renews at the beginning of each calendar year. Coverage for expensive conditions such as cancer, heart conditions, hospitalizations, and other issues is available as a third-party supplemental policy – that is paid by the insured.
Moreover, when it comes to health insurance you may have more than just one deductible. There can be a deductible for prescription drugs, along with copayment for drugs – such as chemotherapy and other cancer drugs – that are extremely expensive. This copayment can either be a flat fee, or a percentage of the price of the drug and some drugs may not be covered at all, requiring the patient to foot the full expense. Most insurance companies have a maximum out-of-pocket expense that the insured must pay per year, but if a drug or service is not covered the amount that the patient must spend is not calculated in that maximum out-of-pocket. In fact, healthcare costs to consumers – euphemistically called “cost-sharing” – have been growing faster than the rate of inflation.
Finally, though you may believe that you have coverage, sometimes the doctors and other professionals who are treating you may not be in your health insurance network. You could be charged out of network prices for your care which are significantly higher than in-network.
Cancer treatment is rough. It’s not like going to the doctors for a routine checkup were shot, but can have debilitating side effects that require someone to care for the patient. The hidden costs to the family can mean someone taking time off from work to care for the patient, even leaving work entirely to help support and care for their family member. Losing salary, facing rising medical expenses, and still needing to provide for the basics such as food, shelter, and transportation can stretch family budgets to the brink.
Charities can offer some assistance with food and transportation, sometimes even a home health care aide. Some pharmaceutical companies also offer assistance with making drugs more affordable or even free, if the patient qualifies. If the patient qualifies for disability, those payments and other forms of government assistance can make things easier. However, all of these approaches require navigating labyrinthine bureaucracies with documentation and paperwork. During the latest government shutdown, millions of cases have ground to a halt, leaving patients and their families twisting in the wind.
It’s hard to talk about care in terms of dollars instead of outcomes. Many cancer patients fear of speaking to their doctors about the expense for fear that doctors will compromise their care because the patient may not be able to afford it. Patients may be unwilling to compromise their family’s financial futures such as college funds, real estate, or other holdings. It is a deeply personal and deeply stressful choice. Even some of the advice on cancer-oriented sites has the feeling of platitudes and tone-deafness. In fact, the National Institutes of Health’s National Cancer Institute has a term for it – “financial toxicity.” In a study by Duke University, cancer patients reported spending on average 11% of their total household income on cancer treatment and associated expenses. It’s of little comfort that these medical expenses can be written off on state and federal taxes when so much suffering is at stake.
Additionally, navigating your insurance company’s approval process for drugs, procedures, and surgery may be complex or could take a longer time than you and your care team may be comfortable with.
If it sounds like a lot, it is. Working with your care team to find reasonable alternatives, sorting out alternative treatments, and even ultimately deciding if treatment is worth the expense are deeply personal choices. Survivorship, the period in which cancer is either cured or in remission, it has its own set of expenses and may include steeply increased premiums for health insurance. Recurrence among certain types of cancer varies, making financial planning for a future recurrence a wise decision.
We are uncomfortable as a nation with scenarios that are less than rosy and outcomes that are less than happily-ever-after. Everyone likes to think that they will conquer cancer, survive, and go home to their loved ones. While a positive outlook is one of the most essential tools for handling cancer or any other chronic illness, the best medicine for a clear head is a large dose of reality. With all the miraculous possibilities of medical science, all the skill in the world, and all the hopes and prayers of loved ones, the outcome may not be the one desired.
In many cases, cancer treatment piles up massive bills even with primary and supplemental insurance policies. These bills may be greater than the estate of the deceased, in which case the estate is considered insolvent. Florida and federal law dictate which creditors must be paid from the estate, and medical bills incurred within 60 days of death take precedence. These final bills would be paid first, liquidating property if necessary, with other creditors taking a portion of what’s left over – if anything.
Spouses and children cannot be held financially responsible for the debt after cancer from the deceased’s medical or care expenses in the state of Florida – those expenses belong to the estate. However, these rules always have an exception. If the surviving spouse cosigned a loan for the deceased spouse, then that loan must be paid by the surviving spouse. Medical bills and other debt after cancer must also take a back seat to federal taxes. In other words, financial planning for cancer patients is a complex, emotional, and difficult activity at a time when everyone is under stress and prone to making decisions that may look good on the surface, but have unfortunate consequences down the road.
Around South Florida, we are known as a bankruptcy practice, but there is so much more to what we do. In addition to helping people handle their debt after cancer, we also offer service in the area of estate planning and asset protection. We wholeheartedly believe in planning for the worst but hoping for the best. For cancer patients and their families, sound and realistic financial planning will help in the before, during, and after of cancer, protect your family’s financial stability, and protect the assets that provide a solid foundation for the future.
We don’t shy away from the tough stuff, but rather we represent our client’s best interests no matter what their circumstances. We are here to help with every aspect of financial planning and debt management. Our offices in Fort Lauderdale and West Palm Beach are open six days a week for your convenience. During the week we are open from 8 AM to 7 PM, Saturday from 10 AM to 2 PM and we are open Sunday by appointment only.