Are you gambling with future costs if you don't purchase specialized cancer insurance?
Sometimes it seems as if we live in a world where we are always waiting for the other shoe — or the next shoe — to drop. Those witty commercials featuring Flo the Progressive Insurance Girl suggest that in a sweet, slightly subversive way.
We also grew up with those life-and-death insurance “scenario” commercials featuring well-to-do parents or seniors sitting contentedly in their kitchens contemplating their children’s well-being after their departure from the world.
One of the more thought-provoking insurances on the market is cancer insurance, offered by companies running the gamut from Mutual of Omaha and AFLAC to cancerplans.com, cancer-coverage.com and humana-one.com.
Specialized cancer plans may be of special interest to some families in the Jewish community, as both Ashkenazi and Sephardic Jewish women have been revealed to have higher predispositions to breast, ovarian and pancreatic cancers with the presence of BRCA1 and BRCA2 mutations in their genetic family trees.
While common insurance plans like HMOs and PPOs (purchased a la carte or provided by companies to employees, partially or fully) cover the basics, cancer-focused plans are supplements that promise the buyer extended medical benefits not covered by major medical insurance plans.
New York-based Tomer Dicturel, founding partner of Advanced Wealth Partners, notes many of his clients from Philadelphia and other Northeastern cities have expressed a demand for extra protection. While Dicturel acknowledges that cancer insurance on the surface may offer piece of mind, he cautions families at different income levels to weigh their options. “Cancer insurance is a tricky product,” Dicturel points out. “If you are prone to cancer and it runs in your family, cancer insurance is better than nothing. However, it is not an ideal solution.”
While a number of companies “offer this specialized product, the problem is that it ultimately does not give the customer much,” he says, “On one hand, blue- collar families can afford it, and the companies selling it are very reputable. However, these special add-ons neither promise a lot nor deliver a lot” in the way of benefits.
Dicturel explains that with some research or a good broker, you can find much better policies on the market. One example he cites is disability insurance, which comes in long-term and short-term formats. While these plans and add-ons are much more expensive, the coverage is comparatively substantial. He also points out there are some insurance policies with critical illness elements added in at no extra charge, such as a “living benefit.” In some policies, if you get cancer, you can get money from the policy to offset medical expenses even if you do not die. “Unlike cancer insurance, whose premiums can go up, term life insurance with the living benefit, as well as other policies and add-ons, are available in a range of configurations and prices with very consistent pricing. While disability insurance is more expensive, you get more coverage for your money.”
Mark V. Pauly, professor of healthcare management, business economics and public policy at the Wharton School of the University of Pennsylvania, explains that the changing landscape of health insurance brought in by President Barak Obama and the progressive side of the aisle in Congress may render these specialty plans obsolete. “It’s more rational to buy insurance against all diseases since any disease can bankrupt you,” says Pauly. “When you think of it, it is silly to have a policy that will protect you against cancer but not heart disease or Parkinson’s, or another catastrophic illness. It would only make sense to buy a cancer policy if you think you can outwit the insurer and get a low premium relative to your likelihood of collecting.”
Pauly adds that as an alternative, for extra peace of mind, you could investigate insurance plans that pay cash on top of health costs if you or a family member gets cancer. “While I am not sure about what all the details will be when the dust settles” on the Affordable Healthcare Act, “I am sure that full coverage will be the only game in town for individuals wanting to buy insurance through the government-regulated exchanges,” Pauly says.
Robert Field, professor of law and professor of health management policy at Drexel University, is even more emphatic about the flaws of logic that go along with a cancer-specific policy. As he sees it, one’s odds of getting a specific illness like cancer are small, while odds of getting an illness of any kind during a lifetime are high. He sees cancer-focused policies as emotional gambits, similar to travel insurance that covers plane crashes. While people can relate to cancer and perishing in a plane crash, the odds of these things happening randomly are quite low, he says. “What you want to do is protect your family against the full spectrum of disasters that can happen, which makes picking out one kind of disaster not a wise financial move,” says Field. “By getting a narrow insurance policy, you are excluding yourself from other coverages.
“If you do have a general insurance policy, you don’t need to supplement your existing policy. You are covered for that. If you are concerned about cancer and you have a family history, you may want to talk to your broker or somebody with your insurance company to make sure you are covered by your policy, make sure it is generous, and, if necessary, pay the extra premium.”
Elyse Glickman is a writer with expertise in health and travel issues. This article orriginally appeared in the special section, "Fighting Cancer."