What to Know About Health Insurance Coverage for Cancer Treatment

What to Know About Health Insurance Coverage for Cancer Treatment

Reviewed by Jasper Clinical Board

Last updated 5/24/21

For many people, cancer treatment isn’t just a challenging medical journey. It’s a financial one, as well—and no aspect of it is more complex (and often confusing) than health insurance.
Let’s review how health insurance works, what expenses it covers, and how to keep your finances organized.

Health insurance 101

First, let’s cover some basics: Health insurance exists to help patients cover healthcare costs. You pay your insurance company a monthly fee (called a “premium”) to buy “coverage”—i.e., an insurance policy. Then, if you run into big healthcare expenses, the insurer will help pay your bills.
Most people in the US get health insurance through their employer. (In this case, you don’t typically pay the full premium yourself.) Others purchase their insurance through the ACA Marketplace (aka “Obamacare”), while still others are covered by Medicare or Medicaid. Each of these plan types has its own distinct features, but they largely share the same basic structure.
It’s important to understand that health insurance almost never completely covers your costs. At virtually every step, you’ll have to share the financial burden. Here are the most common ways that happens:
  • Copays: When you receive healthcare—whether it’s a routine doctor visit or an emergency trip to the hospital—you have to hand over some cash in person. This copayment (copay) might be $5 (to pick up a prescription medication), $35 (to see a specialist), or $200 (for an Emergency Room visit).
  • Deductibles: Before your insurance kicks in and helps cover your bills, you have to pay a certain amount out of your own pocket. This is called your deductible. It’s around $1,655 on average, but can run much, much higher. Typically, health insurance plans with lower monthly premiums have higher deductibles, and vice versa. A plan may look affordable because it only costs $50 a month—but if the deductible is $8,000, it won’t give you much protection when you need it.
  • Coinsurance: Even after you’ve made your copays and met your deductible, you’re not home free. Many insurance plans will only cover a portion of your ongoing healthcare costs (e.g. 80%) while the rest (e.g. 20%) is your responsibility. This remaining portion is called coinsurance.
The good news is that some (not all) healthcare plans offer an “out-of-pocket maximum” or “out-of-pocket limit.” This means you’re only responsible to pay out of pocket up to a certain point annually. After you hit this limit (say $12,000) for the year, your insurance company will take over and begin paying 100% of your healthcare costs. 

How does health insurance work during cancer treatment?

As we mentioned above, different insurance plans operate differently. But here are the steps you’ll need to follow in most cases:

1. Find an in-network provider

Your insurance company will only cover services from certain doctors and hospitals, and you’ll typically pay less to see an in-network provider and more to see an out-of-network one, provided your insurance will cover some level of out-of-network care. If you’re in a “health maintenance organization” (HMO), you’ll need to see providers in that specific HMO group, and get a referral from your primary care doctor to see an oncologist or other specialist. If you’re in a preferred provider organization (PPO), you’ll have to check with each doctor to make sure they accept your particular insurance plan.

2. Get pre-approved (optional)

This step is listed as optional because not every insurer requires it. But in some cases, you’ll need to get “prior authorization” from your insurance company before getting a treatment, seeing a provider, or picking up a medication. Typically, your provider will start this process by sharing the treatment plan with your insurer, who will then approve or decline. Ask your doctor and insurance company about pre-approval beforehand, so you’re not stuck with the bill if your insurer refuses to pay.

3. File a claim (if necessary)

Typically, your doctor will file a claim on your behalf. This means that, after treatment, they’ll contact your insurance company and ask to be paid for their services. In some cases, however, you’ll need to file a claim yourself. (This may happen if you see an out-of-network doctor, for instance.) That means you’ll pay the doctor directly for treatment (be sure to get receipts!) and then ask your insurer to reimburse you. Different insurance companies have different procedures for filing claims, so ask your insurer for clear instructions.

4. Document everything

Keep detailed records of your treatment plan, your providers, and your medications. Save and document receipts for all your expenses, and never throw away paperwork from your doctor or insurance company! Further, you have a right to ask for a detailed bill showing the names of every service and treatment you received from your provider, plus the amount billed for each. Make a practice of asking your provider’s billing department for these documents. For all your paperwork, always make digital copies and keep them in a secure online location. If possible, ask a trusted friend or family member to be in charge of your paperwork. Cancer treatment can be exhausting, and you may not have the energy to be your own bookkeeper.

What if my claim is denied?

Insurance companies will occasionally “deny” a claim for a cancer treatment. This simply means they’re refusing to pay for the treatment your doctor has ordered. If this happens, don’t panic. 
Ask your insurance company to explain why the claim was denied, how to file a formal appeal, and how long you have to do so. There may be a simple “coding error” which your doctor can fix for a quick approval. In other cases, insurers may deny a claim for a name-brand prescription but approve a generic version. In other words, there may still be an easy way to get the care you need.
If you end up filing a formal appeal, ask your healthcare team and a social worker for help.  Patient Partnerships and the Patient Advocate Foundation can be good resources here. Your state also has an insurance commission which may be able to assist, and perhaps a Consumer Services Program as well. Keep written copies of all communication with your insurer, and read this great article from the American Cancer Society for more information.

How much does cancer cost after insurance?

Broadly speaking, health insurance covers cancer treatment. In other words, as long as you’re insured, you should be able to get the care you need. 
That said, healthcare plans vary tremendously. A high-end “Cadillac” insurance plan might protect you almost entirely from out-of-pocket costs during your cancer treatment. But a bare-bones “catastrophic” plan could leave you on the hook for huge bills (think high copays, high coinsurance, and high deductibles).
There’s no easy way to estimate your out-of-pocket costs, but it’s fair to say that cancer is expensive. A 2017 study found that the typical cancer patient spends about $700 per month out of pocket, after insurance. Another study in 2019 found that annual out-of-pocket costs topped $20,000 for 1 out of 5 cancer patients, with another 16% of patients spending $10,000 - $20,000, and a quarter of patients spending between $5,000 and $10,000. 
If you’re worried about your ability to afford out-of-pocket expenses for your cancer treatment, talk to a social worker, case worker, or financial counselor at the medical center where you’re being treated. Many hospitals and treatment centers will be happy to work out a special payment arrangement, possibly even offering you reduced-cost care (most facilities will have a “charity care” program, which is often easy to qualify for, so always ask for an application).

The content on this website is intended to provide the best possible information for you, but should not be considered—or used as a substitute for—medical advice. If you have questions about your diagnosis or treatment, please contact your health care provider(s). For questions or comments about this content, please email us at