Calculator and stethoscope on financial statement concept for finance health check or cost of healthcare

What Financial Toxicity Means — and a Novel Solution

Serious illnesses like cancer can take a damaging toll on an individual’s finances―But there are smart solutions

Too often, serious illness is accompanied by another woe: major financial strain.

Coping with an illness like late-stage cancer, advanced heart disease or ALS can drain savings and rack up bills swiftly. Even if an individual has health insurance coverage, the economic toll — from pricey copays and out-of-network expenses to time away from work — can be difficult to bear.

What is “financial toxicity”?

There’s a phrase for this mix of medical and financial pressure: “financial toxicity.” According to the National Cancer Institute, financial toxicity “describes problems a cancer patient has related to the cost of treatment.” All sorts of traits — from age to severity of illness to type of employment — can worsen one’s financial toxicity. Further, financial toxicity can lead to a vicious cycle: “Studies have shown that patients who have financial toxicity reported … more symptoms, and more pain,” the National Cancer Institute writes.

Indeed, a recent Washington Post report examined how childhood cancer survivors, in particular, can be plagued by financial toxicity. “[Recent] research … found that financial concerns prompted about one-third of the 2,800 [study] participants to skip or delay needed screenings, recommended medications or trips to a doctor or hospital,” the alarming article reads. “Half said they worry about how to pay for their care.”

Dr. Yousuf Zafar, a medical oncologist affiliated with the Duke Global Health Institute, was quoted in a recent NPQ article saying, “Multiple studies have shown that cancer patients and survivors are at risk for facing treatment-related financial burden, with a small minority at risk for extreme burden in the form of personal bankruptcy.” Recent data indicate that at least 30 percent of cancer patients will go into debt, three percent of whom will file for bankruptcy.

When an initial diagnosis of a serious illness occurs, it is critical to assess your financial situation as one of the first steps in dealing with the potential financial ramifications. What are the factors and resulting potential outcomes of financial toxicity? Factors that may affect your risk of financial toxicity:

• Whether you make the most money for your household

• How much money other people in your household make

• How much debt you had before being diagnosed

• Your assets • Costs related to your illness

• How the illness and its treatment affect your ability to work

• Whether you have health and disability insurance and what they cover

Resulting financial problems associated with the diagnosis of an advanced stage illness:

• Less income and assets

• Debt because of the cost of your cancer care

• Trouble paying for housing, food, and bills

• Bankruptcy

• Choosing between advised course of treatment (i.e., expensive oral chemotherapy) and other uses of limited financial resources (i.e., basic necessities like food and clothing)

How can the nonprofit sector help?

There’s a plethora of national and local chapter nonprofits that individuals dealing with an advanced staged illness or disease should take advantage of when it comes to medical research, psychological and emotional support and patient advocacy. Although the Affordable Care Act has helped alleviate some of the financial burden through increased coverage and eliminating caps on lifetime payouts, these benefits are in jeopardy as the debate over “repeal and replace” continues. If rollback efforts succeed, we should expect to see an increase in the effects of financial toxicity. The nonprofit sector has stepped in on this front by advocating against repeal and replace, as well as by providing financial assistance for cancer patients and their families. That being said, while nonprofits focus on access to care, copay assistance and access to drugs, there is little help for discretionary needs. The nonprofit world can only do so much when it comes to the staggering financial burden that has resulted from the effects of financial toxicity on patients and their families.

How do we help?

Unfortunately, financial toxicity is a scenario many Americans and their loved ones are familiar with. But fortunately, there’s a sound solution — it’s just not well known. At my company, Fifth Season Financial, we have a program titled FLAG, “funds for living and giving.” It’s a novel approach to financial assistance that leverages both lending and life insurance. And it can help combat the pain and challenges associated with financial toxicity.

So how do programs like FLAG work? They leverage an asset most individuals already have; their existing life insurance policy. FLAG and similar programs advance to individuals a significant portion of the face value of their life insurance policy. Throughout this process, the individuals’ policies remain in place, allowing them to give the remaining amount to family once they’re gone. Unlike a traditional loan, there are no current payments — any fees and costs (plus the loan itself) are paid at a later date from policy proceeds. Further, FLAG covers individuals’ premium payments, helping reduce the bills that led to financial toxicity to begin with. With FLAG, we work directly with insurance and health care providers, freeing individuals from onerous paperwork.

Perhaps the most empowering part of FLAG — and the element that best helps overcome financial toxicity — is the complete lack of restrictions. Individuals can spend their funds in a way that best suits their context and lifestyle, with absolutely no stipulations or conditions. During my time in the industry, I’ve seen a range of uses: Some individuals may use the funds to pay down medical bills; others may take a memorable trip abroad with family and friends; others still may carry out long-overdue home improvements or give a generous gift to loved ones.

Programs like ours provide sorely-needed relief to individuals who need it most. Financial toxicity is a painful and far-too-common experience — but it doesn’t need to be. There are sources to financially aid and empower individuals when they most need a helping hand. There are solutions out there to combat financial toxicity. It’s a matter of learning about them and taking action so that you can live the fullest life possible, even after the diagnosis of an advanced stage illness.

 

About the author: Adam Balinsky is the Founder and President of Fifth Season Financial. He passionately believes in the mission of the company—to help relieve the financial pressures faced by many patients struggling with advanced illnesses including cancer. After a personal experience dealing with his wife’s breast cancer diagnosis, Adam recognized that people facing advanced-stage diseases have incremental financial pressures affecting everyday life that are not being addressed. Inspired to do something, he developed Fifth Season’s financial assistance program, FLAG (Funds for Living and Giving), designed to bridge the gap between the traditional financial assistance programs available to mitigate the direct medical and treatment costs, and the much broader financial needs of patients. Learn more at www.fifthseasonfinancial.com.

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