Peace of mind through financial confidence

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It's not just a life threatening disease - but a financial disaster. Even in Canada

Getting sick can be expensive. Really expensive. The likelihood of being afflicted with a serious illness is high. Medical expenses can be high also. Recovery can take a long time and this can be very challenging for you and your family.

Did you know about one in six bankruptcies are health related? Critical Illness insurance provides financial relief helping you and your family focus on recovery.

As you will read in the following article, the financial implications of a serious illness can be very significant.


The issue: Cancer patients can face crippling financial hardship, forcing some into bankruptcy.
Solutions: All provinces should cover the cost of expensive out-of-hospital cancer drugs; government benefit programs should better respond to cancer patients’ needs.

Monica Pope probably didn’t need to be told the breast cancer that doctors diagnosed in 2014 was aggressive: one day she suddenly saw the tumour pressing up from under her skin.

What followed was the full traumatic panoply of cancer treatment, including three surgeries, chemotherapy and radiation.

But that was not all. Complications from surgery mean Pope, 51, has been unable to work at her technical sales job the past 34 months and now must find a new occupation. Even when her workplace disability finally kicked in after 19 weeks, it paid the single woman $23,000 less than her annual salary.

Add in expenses like drugs and hospital parking, and last year Pope felt forced to take drastic action. In a country that prides itself on looking after the sick, no matter their ability to pay, she declared personal bankruptcy because of cancer.

“People will deal with different stresses, they will have financial stress or problems with health,” says the southern Ontario resident. “When you throw everything together all at once, there comes a point where you say ‘I just can’t do it any more.’ You need to be able to breathe.”

Ending up in bankruptcy because of disease sounds like a quintessentially American problem, and it is undoubtedly more common in the U.S.

Yet interviews with patients, and a growing body of research confirm that having cancer in Canada is not just a life-threatening burden, but often a financial disaster, too.

Prolonged loss of income and cancer-related costs — from drugs to travel expenses — can combine to have a devastating effect on patients already in the health struggle of their lives.

About one in six bankruptcies that trustee Hoyes Michalos handles involve health problems, many cancer-related, said co-owner Doug Hoyes.

“It’s a huge issue,” says Gabriel Miller of the Canadian Cancer Society. “For middle-class Canadians and working-class Canadians, a cancer diagnosis is like standing on thin ice, and you only hope you can get back to work and cover your bills before you go under.”

To keep from sinking, some patients drain retirement savings, re-mortgage homes or end up on welfare.

Making the ordeal more challenging is a historic shift to people undergoing cancer drug treatment at home rather than in hospital. For more than half the country, that means patients themselves have to pay the often sky-high price of medications.

Patients and their advocates also complain that federal and provincial income replacement programs are woefully inadequate for people faced with months or years off work because of disease.

The system was designed in a different era, when being diagnosed with cancer inevitably meant a drastically curtailed life expectancy; now many patients can live long lives after treatment, often returning to work, notes Miller.

“Those (government) benefits just expire too soon for a lot of people,” he said.

The situation can be even more precarious for self-employed Canadians — people like Lawrence.

He was already feeling the pinch after being off work as a Toronto real estate agent because of a perforated ulcer. Then the 56-year-old was rocked by a stomach-cancer diagnosis in December 2015, leading to surgery that removed 60 per cent of his stomach and his gall bladder. “I was gutted,” he says.

So were his finances. Lawrence thought the disability insurance he had been paying into for decades would fill the gap, but the insurance company refused to honour his policy, pointing to an alleged pre-existing condition.

Earlier this year, he, too, filed for personal bankruptcy.

“It’s something I’m not proud of, something I never thought I’d do. I’ve always been a proud, stand-up individual,” says Lawrence, who asked that his last name not be published. “But I had no alternative … You’re not bringing in income, bills are mounting, (creditors) are not compassionate and understanding. They want their money.”

He and other Canadians do, of course, receive actual oncology treatment, mostly without charge. Beyond that, cancer patients are largely on their own.

Two of every five end up off work for at least six months, according to a 2012 survey by the Canadian Partnership Against Cancer. Even 60 per cent of their caregivers either have to cut work hours or quit outright, estimated a Lung Cancer Canada survey.

Overall, a 2010 McMaster University study estimated that Canadian patients’ families see incomes plummet 26 per cent – $3 billion in wages lost every year because someone got cancer.

Perhaps the most unfortunate among them are parents of sick children, who must be at the patient’s side throughout treatment, and lose an average of $26,000, according to another McMaster study.

They include Vancouver’s Patrick Sullivan. When his son, Finn, a twin, was diagnosed with a rare muscle cancer in early 2007, the 21-month-old was prescribed a special type of radiation treatment available only in the United States.

The B.C. government covered the cost of the therapy, but the family had to travel to Boston and stay there for two months on their own dime. Tragically, the treatment failed to halt Finn’s malignancy, and he died several months later.

Patrick and his wife are both lawyers, and his partners paid him an advance during those months off work. Relatives also raised money to help with expenses.

Yet, at the end of the day, as they mourned the loss of a son, the couple still had to take out a second mortgage on their home to cover the bills.

“The reality is that everything catches up to you,” says Sullivan.

Many employees who get cancer do have access to workplace disability benefits, though usually at a rate significantly less than their salary. An estimated seven million Canadians have none.

For those who qualify, there is Employment Insurance (EI), yet its sickness benefits last for at most 15 weeks, and provide no more than 55% of salary.

The Canada Pension Plan (CPP) provides disability benefits to people under 65, but cancer patients report trouble qualifying for the program, which pays about $1,300 a month. Rates for welfare, the last resort, are generally less than that.

Many patients are “shocked” at the dramatic cut in income they experience, says Ilene Shiller, a manager of the Money Matters program at Wellspring, a Toronto-based cancer charity.

Some even end up delaying treatment to stay at work longer, she says.

Amanda Dempsey did not take that risk, but a cervical cancer diagnosis last year was just the start of her troubles.

A severe allergic reaction to dye used in surgery almost killed the Bathurst, N.B. woman, while radiation caused nerve damage in her hip that still makes it difficult to walk. She didn’t have enough hours in her last job to qualify for EI, and CPP ruled her illness was not sufficiently “severe and prolonged” to make her eligible for its benefits.

Now she and her truck-driver husband struggle to make ends meet.

“Everything has come to a stop,” said the 36-year-old. “To go for a Sunday drive, we can’t do it, we can’t afford it … You’re living paycheque to paycheque.”

Increasingly, many Canadians with cancer are also facing substantial added costs to try to get better.

The Canada Health Act requires that drugs administered in hospital be covered by medicare, but medicines that can be taken at home — expected to make up 60 per cent of cancer drugs by 2020 — do not have to be funded by provinces, and often are not.

While Quebec and the western provinces do pay for all cancer medications, Ontario and the Atlantic provinces have less or non-existent coverage for take-at-home medicines, whose costs typically run to thousands of dollars a month.

For Ontario patients under age 65 with no workplace drug plan, or who cannot afford the plan’s co-pay — usually 20 per cent — the province’s catastrophic drug coverage kicks in. But it requires patients to contribute a deductible of four per cent of their gross income — $2,600 a year for a family making $65,000 – and funding is only available after waiting several weeks.

Coverage in the Atlantic provinces is less generous.

Shifting the burden of medication costs onto patients’ shoulders has even led many hospitals to employ a new class of health worker: drug-access “navigators” who help people obtain needed medication.

For Deb Maskens, an advanced kidney cancer patient from Guelph, Ont., the expense of drugs that are prescribed at home, or in the U.S. if not available in Canada, are a constant pre-occupation.

“The thing that keeps me up at night is, if I do need a drug or some treatment of some sort, will we have the funds to cover it?” she said.  “And if we have to sell our house, is that even a reasonable thing to do? Probably, I would just go quietly.”


If you’d like to discuss this topic in greater detail or have any questions, please reach out to a member of your Arbutus Financial Team.

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