With April winding up, and spring on the way, its been nice to see the daffodils and other early spring flowers beginning to wake up. For many years the Canadian Cancer Society has used April (and daffodils) as a major fundraising drive. Both the flowers, and an interesting CBC news article based on Cancer Society Research caught my attention this year.
The research study, released in late December 2024, found that the average lifetime extra costs incurred by a cancer survivor to be $33,000. Across Canada, the cost totals $7.5 Billion dollars each year to both cancer patients and their caregivers. That’s an enormous sum of money.
As a financial planner, I can’t overstate the importance of looking at the impact of your health on your financial situation. Unfortunately, an illness such as cancer is ridiculously hard to model in planning software. And, as the saying goes, your mileage may vary.
Hidden costs of surviving cancer
My friend Kate has spent a good part of the last decade dealing with a rather pesky melanoma. Melanomas are particularly tricky cancers – if you can get them quickly, they can be “sliced and diced”, but if they spread, they can quickly turn into one of the most aggressive forms of cancer. Over the last decade, advances in skin cancer treatment have led to immunotherapy which has proven more effective and less debilitating than the traditional chemotherapy to which Kate has fortunately benefitted from and today remains cancer free.
Mole mapping helps skin cancer survivors stay on top of any future recurrence. A new AI imaging technology, mole mapping helps doctors to identify potential problems at its’ earliest stages by identifying possible problematic moles and flagging any changes from previous scans. Given her history, Kate has been advised by her dermatologist to have the procedure done each year. Over the past 5 years, the cost has gone from $500 to $800, with an average increase of $100 per year. The cost is not covered by OHIP, and isn’t widely covered by health insurance plans. Yet, it is an important measure for Kate to have this scan done early, especially with an aggressive cancer like Melanoma.
If we assume Kate has 40 years of scans ahead of her – the total cost of just the scans alone would easily exceed the $33,000 lifetime cost quoted by the Cancer Society.
Travel and Parking
Likewise, my friend Steffan has had his heart cancer spread into his liver. Unfortunately his “pesky rent-free tenants”, as he calls them, are not in a spot where they can be removed. For the last few years he has been on a variety of chemo treatments. Every second Monday, he has to take time off work, and travel 90 minutes into downtown Toronto. While his work provides 10 sick days, those are quickly used up in a 52 week year. Plus, there is the cost of transportation, and potentially parking. And of course – the challenge of eating while spending a day in a different location. And, in the case of bad weather, the need to perhaps grab a hotel room the night before – it all adds up quickly. Stef is fortunate in that he lives on a go transit line into the city, but many others are not. And, as I am sure you know, hospital parking isn’t exactly cheap in most situations. Just being in treatment can be expensive. And, in Steffans case, the treatment will last for the rest of his life – making this a permanent cost.
Medications
When Steffan and I chatted about this article, he also raised another interesting issue – the cost of medication. Some of his chemo meds have been covered by OHIP and others have not. Some of those were covered by his employer health plan, and some were not. Fortunately, Ontario does have an Exceptional Access Program for expensive medications that fall into this last category – but it is by no means a guarantee that the medications you need will be approved for coverage.
Scam Artists – a whole different expense
My mom’s cancer journey was expensive – very, very expensive. In her case, some very dishonest folks got their claws into her while she was dying. They promised miracle cures range from inexpensive (juicing carrots), to ridiculously expensive – a “fermented bean sauce” that cost $4000 USD a month! Another “cure” involved someone promising to realign the atomic spin of her molecules, using a magic “wand” and a laptop. Not only is atomic spin not related to cancer, humanity doesn’t have the kind of technology available to use – and certainly not on laptop format. (I suppose, to be fair to the “specialist”, if we did have that level of technology available, it would have likely vaporizing her instantly, which, one could argue would have cured her cancer…hardly a recommended option.
The ultimate result was that my mother sent thousands of dollars, and sadly, passed away from her cancer. It was a tough time for our family to watch our loved one being taken advantage of by unscrupulous people. I can’t put a financial price tag to the stress we all felt watching this happen to someone we loved.
The price of caregiving
Time and time again, I see people who take time off work to care for their loved ones – and no work benefits plan in the world will cover the cost to do that. Recently, those covered under Employment Insurance have had access to EI caregiving benefits, to support a family member who is critically ill, or in need of end-of-life care. I am delighted to see this put into place – it’s a massively important thing for our society to have in place. That said, the limit is $695/week or 55% of employment earnings of the caregiver, whichever is lower. In many cases, this may not be enough, but it is certainly better than nothing. The benefit is limited to 35 weeks if you are caring for a child, 15 weeks for an adult, or 26 weeks in an end-of-life situation. You also have to report in every 2 weeks to the government – something that will in itself take time away from your caregiving duties.
Children can be especially expensive.
Caregiving a child with cancer or another serious illness can be particular expensive – usually the parent(s) will need to take copious amount of time off work. Its not always easy to do this even in a two parent household.
I’m a firm believer that every child (and adult!) should have some basic life insurance and critical illness insurance put in place as close to birth as possible. The internet is filled with opinions on this – and one opinion that drives me bonkers is when people say you shouldn’t insure your children, as they are assets, not liabilities. While true if you have a healthy child, I don’t think the argument holds any water if your child becomes sick. Some of the most financially devastated families arose from one or more children being seriously ill. The cost/benefit ratio of insuring a child as soon as possible is very low. That’s the reason I insured that all three of my kids within days of birth. They each had a life insurance policy, with an option to get more insurance regardless of health as an adult, and a critical illness policy. While (knock on wood), none of them have had cancer as children, some of them are unlikely to qualify for any kind of insurance later in life due to other medical conditions. Because we put insurance on them as infants, however, they and their future families will be OK, as we have secured coverage for them when they were newborns. I’m deeply grateful we took that step.
How adults can control financial risk from Cancer and other serious illnesses
There are four key things that you can do as an adult to mitigate financial risk from a serious illness:
- In your working years, get the most robust Long-Term Disability plan you can. If you have group benefits, elect the highest level of coverage. This is not the place to skimp out on your benefits! I often see people more concerned about vision coverage than disability coverage. You can probably afford to pay your glasses out of pocket – but I guarantee you a prolonged health issue will cost you far more.If you have only minimal options at work, or no group benefits, consider getting your own personal Disability coverage. I recently had a client find out that her group plan was more concerned about forcing her back to work early than listening to her doctor. I’ve never seen that situation occur on a personally owned plan. While insurers can deny a claim, I’ve seen far more problems on group plans than individual plans. And, coverage is usually far more robust. Most importantly, its not tied your employer – you take it with you wherever you go.
- Critical Illness insurance is super flexible – it pays a lump sum if you are diagnosed with a number of illnesses, of which Cancer, Stroke and Heart Attacks are the most important and frequently illnesses. You don’t know what your costs will be, but having a lump sum allows the greatest flexibility in using the proceeds as your situation needs. I’ve had clients use it to pay for childcare, or allow a spouse or parent to take time off work to care give.
- Get an emergency fund in place – don’t park all of your savings in registered retirement plans. This is great planning advice for ANY situation – the rainy day fund is important for all the reasons we can’t imagine until they happen. Cash on hand give you flexibility and control at any age.
- Have a Line of Credit at the ready. Ideally, you’ll have it, but never use it. But, if you need it, its an instant, preapproved loan available to help you bridge a gap. Even if you have significant assets, a LOC can be a huge help – liquidating investments may cause tax issues, or be subject to timing restraints. An active Line of Credit lets you get funds whenever you need it, allowing you to hold onto other assets until the time is right. Do this while life is good – because the bank might not be wanting to approve a loan when they know you are ill!
Plan for the worst, but live for the best
Hopefully, you won’t find yourself dealing with cancer or another serious illness. Take the time, however, to look at your personal safety net on a regular basis, and ask yourself what would happen if you had $33,000 in unexpected costs?
I’m deeply grateful to the Canadian Cancer Society for undertaking this research. None of us want to find out we have cancer, but the learnings from this report can certainly help us all be better positioned if the worst were to happen.
Ryan