Introduction
The word “Cancer” itself is sufficient to give a fright and make one contemplate on the sufferings involved in the life of one diagnosed with the deadly disease. It is not only the emotional and physical loss but also the financial loss associated with the cost of treatment that magnifies the miseries of cancer patients and their families. Apprehension of treatment affordability and financial survival are the major concerns for them.
Recent advances in cancer treatment have opened new treatment options, such as targeted therapy and immunotherapy, for people diagnosed with advanced-stage disease. However, these advanced treatments are costly and remain out of reach of many.
Health Insurance policies are usually bought considering the exorbitant cost involved in the treatment of any disease. The most common health insurance policy which is sold and bought in India is the Hospitalisation Indemnity product. The product is available in the Indian market in the sum assured range of ₹ 50,000/ to ₹ 20 lakhs with the average sum assured of ₹ 3 to ₹ 5 lakhs which is sufficient enough to take care of most of the diseases, but might prove to be insufficient to take care of any critical illness like cancer of advanced stage, coronary bypass graft, kidney ailments etc.
Cancer incidence in India
As per the National Cancer Registry program, the estimated number of incident cases of cancer in India for the year 2022 was found to be 14,61,427 and one in nine people is likely to develop cancer in his/her lifetime in India. The leading sites for cancer were lung and breast in males and females, respectively. Amongst the children of the age group 0-14 years , lymphoid leukemia was found to be the leading site (boys: 29.2% and girls: 24.2%). It is estimated that the incidence of cancer cases will increase by 12.8 percent in 2025 as compared to 2020.1
GLOBOCAN (Global Cancer Observatory ) had predicted that cancer cases in India would increase to 2.08 million, accounting for a rise of 57.5 percent in 2040 from 20202.
Cost of cancer treatment in India
It is not only the incidence of cancer cases that is on the rise but also the cost of treatment is surging every year. The cost of treatment for cancer varies with the type of cancer, its location, its stage, the city, and the hospital from where the treatment is taken, but still, the minimum price for cancer treatment in India starts from ₹ 90,000. The average cost of cancer treatment in India is ₹ 5,00,000 and the maximum charge for cancer treatment in India is up to ₹ 27,50,000.3 This cost is recurring as the duration of treatment may extend to several years as many cancers reoccur.
Oncology medicines forming a major component of the treatment cost are quite expensive. Newer drugs due to ongoing research in advanced cancer treatment are priced very high and are out of reach of many patients. The global oncology drug market was valued at USD 184.95 billion and is projected to grow from USD 484.32 billion in 2023 to USD 484.32 billion by 2030.4
Direct OOPE ( Out of pocket expense ) on cancer treatment
A study on “Financial toxicity due to Cancer Treatment” published in July 2023 funded by the Department of Health Research, Ministry of Health and Family Welfare, Government of India reveals some striking facts about cancer treatment.
- Per visit mean OOPE on outpatient cancer treatment was computed as ₹ 8,053. Taking into account the average number of visits per month for outpatient treatment as 2.76, the mean monthly direct OOPE incurred on outpatient treatment was estimated as ₹ 22,227.
- The major contributors of OOPE for outpatient treatment were diagnostic – 36.4% and medicines -27.8%
- The estimated OOPE per episode of hospitalization was ₹ 39,085. The total annual direct OOPE on cancer treatment was estimated at ₹ 331,177.
- In the case of hospitalized treatment, medicines were the major component at 45% followed by diagnostics at 16.4%, and procedure/surgery formed only 12.1% of the major contributors to OOPE.
- The economic impact of cancer care on household financial risk protection using standard indicators of catastrophic health expenditures (CHE) and impoverishment indicated that the overall prevalence of CHE and impoverishment for outpatient treatment was 80.4% and 67% respectively as compared to hospitalization treatment (it was 29.8% and 17.2% respectively). Thus, it is not the hospitalization cost that is creating financial strain but the outpatient cost of cancer
- The prevalence of CHE for hospitalization was highest amongst those who are not covered by any health insurance scheme at 34.4% and was lowest for those covered by Ayushman Bharat at 16.01%.
Need for a separate Cancer Insurance policy
Outpatient treatment which is the major cause of catastrophic health expenditure and impoverishment in the case of cancer treatment may not be fully covered in a hospitalization
indemnity product, which is the major health insurance product sold in the Indian market. Thus even if a person is covered under health insurance, a large component of the cost has to be met out of pocket, necessitating the need for a separate cancer insurance policy.
Cancer treatment requires the patients to undergo many different treatment modalities like surgery, chemotherapy, radiotherapy, targeted therapy, immunotherapy, etc. which financially drain them out. It is not only the medical cost of treatment but the life of caregivers i.e. the entire family is impacted. It may involve loss of income of the patient and caregivers, traveling and boarding expenses of patient and family, increased cost of nutrition, etc which exacerbates the situation and acts as a barrier to access treatment. Moreover, there is a surge in the cost of complex cancer surgeries/treatments every year.
As per the economic survey 2022-23, the central and state governments’ budgeted expenditure on healthcare was 2.1 % of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21. Besides this, only 37 % (52.04 Crores) of India’s population is covered under any sort of health insurance, which includes all forms of private, employer-based, and government-sponsored health insurance schemes.
With this low government spending and 63% of the population having no health insurance, access to proper and timely healthcare in case of major health episodes like cancer is limited. Those who are insured under the basic hospitalization indemnity product are also underinsured, as the cost of treatment for cancers is quite higher than the average sum assured under health insurance policies. The patients (households) thus have to meet this high cost of cancer treatment out of pocket which is impoverishing many families every year. It is not uncommon in India to even raise medical loans and go for crowd funding for treatment these days
A basic health insurance policy covers only the actual medical, surgical, and hospitalization expenses incurred by the insured. They further have sub-limits on the various expenses like room rent, ICU charges, etc. incurred by the insured. These kinds of policies take care of the expenses associated with hospitalization, medication, and treatment of minor illnesses. Dreaded diseases like cancer, heart attack, coma, or major organ failure are associated with extremely high costs of healthcare which include a substantial component that may not be covered under the hospitalization indemnity products. This could be due cost of treatment exceeding the sum insured, or there could be high outpatient (ambulatory) expenditure not covered under hospitalization insurance. There could also be a need for additional expenses like long-term nursing care or home-based nursing, and loss of income of the patient and caregivers. Such expenses are financially devastating to the household where such an episode occurs.
Frequent research and innovations in cancer treatment can significantly cure and improve the quality of life of cancer patients but the moot question is how many patients are able to avail these advanced treatments with the huge cost involved?
Since treatment of critical illness like cancer treatment requires much more extensive coverage, it needs to be covered by means of a separate critical illness policy or a critical illness rider, or a specific cancer insurance policy.
Citical Illness policies / Cancer Insurance Policies in India
Generally critical illness policies issued in our country provide coverage for two or more of the following critical diseases . The majority of these plans provide cover for cancer as one of the Critical illness.
Critical illness products are available
- On fixed benefit basis or on Indemnity basis as :
- Standalone products
- Riders to life and non-life policies
- Component of a packaged health insurance
Cancer Insurance Policy-A disease-specific variant such as a Cancer Insurance Policy protects from only the dread of cancer and not from other critical illnesses. It is priced at a much lower rate for a high amount of coverage.
Standalone Cancer Insurance Policy offer coverage as high as ₹ 1 to ₹ 3 crore with an initial waiting period of 2 to 3 years for the risk to commence. These plans are available on an indemnification and fixed-benefit basis.
These plans are also offered as Rider along with the base plan in a life insurance policy or along with a base health insurance policy.
In an indemnity type of policy, these plans usually cover the following:
- Conventional treatment : Chemotherapy • Radiotherapy
- Expenses incurred before hospitalization
- Expenses incurred after hospitalisation
- Treatment and/or services rendered anywhere in India
- All hospitalization/daycare treatment/outpatient treatment
- Post-treatment follow-up
- Medical expenses for organ transplant necessitated due to cancer
- Reconstruction of affected body part post-surgery
- Ambulance charges per hospitalisation
Some plans in the Indian market also provide optional cover for the following at an additional cost :
- Second opinion for surgery
- Rehabilitation and pain management
- Hospice care
- Proton beam therapy
- Immunotherapy
- Personalised & Targeted therapy
- Hormonal Therapy or Endocrine manipulation
- Stem cell transplantation
In fixed benefit type of policy, these plans provide coverage throughout the period of illness by
- Lumpsum payout on diagnoses of the disease ranging from 25% to 100% of the sum assured depending upon the stage at which it is diagnosed.
- Payouts at different stages of
- Regular income to the insured during the post-operative care phase or post-chemotherapy/radiotherapy phase to take care of the recurring
Waiting period– These plans come with an initial waiting period ranging from 2 to 3 years. It means that the risk will not commence immediately after taking the policy but after 2 or 3 years as mentioned in the contract.
Survival for 7 or 15 days– In fixed benefit plans the benefit is provided if the insured survives a few days after the diagnosis of the disease.
Premium waiver benefit– On diagnosis of the disease some plans provide a waiver of future premiums under the policy.
Pre-existing cancers are excluded: These plans both indemnity based or fixed benefit based, do not provide coverage once a cancer is diagnosed. An insurer can even impose exclusion for cancer treatment in hospitalization indemnity products if it is pre-existing.
It is of utmost importance that one should go for these insurances while one is young and has started earning. Once a person is diagnosed with a disease the coverage may be denied.
Conclusion:
A Cancer/specified-disease insurance policy provides comprehensive cover and helps to meet the costs related to out-of-pocket medical expenses, experimental cancer treatments, out-of-network specialist consultations, child care, travel and lodging related to treatment, and other living expenses. In addition to this, in order to seek treatment at world-leading medical centers coverage for medical second opinion is also provided under these plans.
Although Insurers cannot control the incidence of high cancer cases, they can definitely play a major role in providing financial backup and helping people get access to quality treatment after a cancer diagnosis.
Though there are a few cancer-specific Insurance plans available by life, health, and non-life Insurance companies in India, unfortunately, due to lack of awareness, these plans are not very popular in the Indian market. Considering the financial toxicity involved in cancer treatment and the limitations of the basic hospitalization product to provide complete coverage, the insurance industry needs to focus more on such disease-specific variants.
Developing, promoting, and creating awareness about cancer-specific policies providing comprehensive coverage including treatment in other lines of therapy besides allopathic for coverage in India and abroad would be a substantial stride by the Insurance industry towards providing access to cancer treatment and care.
Insurance Regulator should encourage not only the development of such innovative products but also develop a framework to enforce the minimum business requirement of such products.
