Insured but Not Covered

For cancer patients, benefit limits can make for hefty bills.

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What's worse—being diagnosed with cancer or discovering that your health insurance won't go the distance in covering your treatment? These days, with earlier detection and better therapies, cancer isn't the death sentence it once often was. But treating it is expensive, and employers and health plans are increasingly placing caps on the maximum benefits they will pay, as well as other restrictions on coverage that hit cancer patients particularly hard. If the tumor doesn't kill you, it seems, the medical bills just might.

The policy limits on coverage typically apply to all illnesses, not just cancer. But experts say that cancer patients are particularly likely to bump into annual caps on doctor visits or drugs, say, because the disease often requires intensive treatments—including surgery, chemotherapy, and radiation—in the months after diagnosis. Even if patients avoid the initial pitfall, they may eventually run afoul of lifetime benefit caps.

"Every year the caps are getting lower, and they're more diverse," says Nancy Davenport-Ennis, Patient Advocate Foundation ceo and founder. "Now insurers are capping their exposure on a range of goods and services."

It's not unusual to see lifetime benefit limits of $1 million or $2 million on health coverage; about half of employer-sponsored health plans have them, according to the Kaiser Family Foundation. But patient advocates say they're now seeing lifetime limits of just $50,000 or $100,000 in some cases.

More patients are encountering other limits for certain products and services, too. Plans may cover only a certain dollar amount for outpatient services, for example, or limit coverage to a dozen radiation sessions. And many plans, while not technically capping drug coverage, place cancer drugs in higher formulary "tiers" that require patients to pay a percentage of the total cost rather than a straight copayment. Faced with the possibility of financially crippling bills for these drugs, which can cost several thousand dollars a month, some patients go without. Many could face the dilemma. One in three women and half of all men will get cancer during their lifetimes, according to the American Cancer Society. Compared with other common diseases, it's expensive to treat. Total spending per year for cancer patients averaged $5,727 in 2004, according to data from the Agency for Healthcare Research and Quality. Spending for heart disease, by contrast, was $4,506 and diabetes, $1,904.

Noting that a round of chemotherapy can easily cost $5,000, Karen Pollitz, a project director at Georgetown University's Health Policy Institute, says, "If you have cancer and your policy has limits on services, you'll hit them going 85 miles an hour and blow right by them."

No choice. That's what happened to Dora McGiverin. Diagnosed with breast cancer last October, the 45-year-old single mother had four months of chemotherapy to shrink the tumor before undergoing a mastectomy. An additional three months of chemo and six weeks of radiation therapy followed surgery. Now, she takes the cancer drug Herceptin.

Just a month into chemotherapy, McGiverin started receiving bills from her providers. That's when she discovered that her health plan covers only $10,000 annually for outpatient services, which include chemotherapy, radiation, and doctor visits. Although she's feeling fine now, she has nearly $98,000 in outstanding medical bills and no way to pay them on her $27,000 salary as a billing manager for a home health agency in Bridgeport, Ohio. "The only thing I can do is wait until treatment is done and then file for bankruptcy," she says.

McGiverin's situation is hardly unique. In a survey published last year in Northwestern University Law Review, researchers found that 46 percent of bankruptcy filers cited a medical reason for their insolvency. Meanwhile, a study of cancer patients conducted by the Kaiser Family Foundation, the Harvard School of Public Health, and USA Today found that 1 in 4 families affected by cancer used up all or most of their savings coping with the disease. The lack of access to adequate, affordable health insurance is such a significant problem that the American Cancer Society is devoting its entire $15 million advertising budget this year to the issue.