Time to read : 7 Minutes
More Aussies under the age of 50 are being diagnosed with cancer than ever before, according to a report by the Australian Institute of Health and Welfare.
And while survival rates of common cancers for people in their 30s and 40s have improved, the cost of paying for treatment can run into the thousands.
The report into cancer also found:
Cancer is most common in older Aussies – it’s estimated that in 2024, 88% of cancers diagnosed will occur in people aged 50+.
There has been a significant increase in colorectal and thyroid cancer for those in their 30s.
While for people in their 40s, cancers of the breast, prostate, kidney as well as colorectal and thyroid have also increased.
Meanwhile, insurance giant Zurich has released a 2024 report into the cost of care^. It gives a detailed breakdown of some of the most common cancers with a snapshot of the out-of-pocket costs including the ongoing lifetime costs in the road to recovery.
For bowel cancer – which is one of the top five most commonly diagnosed cancers in Australia* – the average out-of-pocket cost in the first 12 months after diagnosis is $3,220.
If you happen to be thinking that doesn’t sound too bad. Think again. The average lifetime cost of bowel cancer… for all the follow up appointments or medication, anything you’re likely to need, is a tad short of $60,000.
The costs are higher when it comes to lung cancer. The average out-of-pocket cost in the first year for stages 1-3 is $3,840 while stage 4 is marginally less at $3,730. But… the average lifetime cost of lung cancer is a whopping $85,420.
How does cancer impact your finances?
Putting aside the emotional, physical and mental havoc cancer can have on a person diagnosed – and their family – as we’ve seen from the above numbers, cancer treatment and care does not come cheap.
You may need time off work and this can drain your emergency funds or life savings. Zurich’s Cost of Care report found that more than 60% of patients diagnosed with melanoma skin cancer said their treatment affected their ability to work.
The costs of cancer mount up over time. As a general guide, here’s what you could be up for in the first year:
GP visits: Whether or not you have private health insurance, there are Medicare gaps to pay.
Scans and tests: If you don’t have private health insurance you can generally have these done in a public hospital at no charge, but you may need to wait to get an appointment for the initial round of scans / tests.
Specialists fees: even with the best health insurance plans, you can expect to pay a gap fee as a private patient.
Treatment / surgery: this can cost thousands if you go private. There may be an option to go through the public system and save. If you go via the public system, your doctor will be chosen by the hospital. You will not be charged for most of your treatment or care.
Kate Browne, Head of Research at Compare Club says: “Just because you have private health insurance, it doesn’t mean your cancer treatment plan has to be private all the way. You can opt to have a mix of public and private.”
“For example, if you are having radiation therapy for some patients there will be little difference if at all with the type of treatment you will receive whether you go private or public. In some instances you could be treated at the same facility but if you are a private patient, you will be up for an out-of-pocket fee.”
“Cancer treatment is very confusing and depends on the type and even where you are being treated so a good rule of thumb is always to ask around costs if you are going private and what the options or difference is between the private and public option,” says Kate.
Be aware: as shown in the Zurich Cost of Care report, the cost of cancer does not stop in remission. You may need ongoing physiotherapy, regular follow up scans, medical appointments and prescription medication for the rest of your life.
What are the advantages of using private health insurance in treating cancer?
If this could be summed up in one word, it would be: choice.
When you have private health insurance you have a choice of:
specialists including the surgeon (if needed)
hospital
and in some cases treatment options.
And you can choose to get a second opinion quickly, if you’re not satisfied with the first.
Cancer is tough enough, so having options gives you some control of the situation as to how your cancer journey could play out.
“Every cancer journey is different, even within the same type of cancer it’s complex. There is no cookie cutter solution. Private health insurance gives you flexibility to have more of a say in how you’re treated,” says Kate.
Important tip: Bronze hospital will cover chemotherapy, radiotherapy and immunotherapy – to name a few. But… depending on the type of cancer or other cancer-related treatments that may be needed, a higher tier such as Bronze Plus or Silver may be best. Find out if you’re on the right health insurance cover.
Be aware: different health funds have different agreements with different hospitals. This could mean your nearest hospital might not have an agreement with your health fund, so you may have to travel further for treatment, or incur hefty out-of-pocket expenses.
Another element to consider is that some specialists may have lower gap fees. It's important to dig into the level of cover you have and the specific details if you're worried about cancer.
Trauma cover: the financial lifeline for cancer patients
There’s no shying away from it. Cancer is an expensive disease. According to Zurich, thyroid cancer is one of the most expensive types of cancer to get diagnosed with. While the survival rate is high if the disease is caught early, the average lifetime cost for a thyroid cancer patient is just shy of $110,000.
There is, however, one type of insurance that can be a financial lifeline for cancer patients.
Trauma cover is a type of life insurance which can be linked to another policy, such as death cover, or be purchased by itself. The key benefit of trauma cover is it pays out a lump sum if you’re diagnosed with a serious illness like cancer.
Costs will vary depending on how much cover you want, but it’s quite common to be insured between $250,000 to $500,000. That can be seriously helpful when it comes to getting back on your feet financially or paying for treatment.
Lisa Varker, a financial advisor at Compare Club, says: “The number one rule of a trauma policy is you never know when you may need it. It’s your safety net so it should be taken out before you’re sick, not some time in the future when you think you may need it. It will be too late by then.”
Be aware: if you’re diagnosed with malignant cancer and you try to take out trauma cover, you won’t qualify. If you’re diagnosed within three months of taking out the cover, your cover will be void by the insurer, in other words, you won’t get a pay out. If you’ve had cancer within the past 10 years, the insurer is unlikely to cover you. Always read the product disclosure statement.
Lisa has seen first hand how the tax-free, lump sum payment has helped many of her clients who were unexpectedly diagnosed – months or years after taking out the policy.
“The payout is a big financial boost which not only could pay all your medical bills and expenses but allows cancer patients to seek the best treatments available world-wide. If there is a revolutionary treatment or a doctor who’s a leader in their field that’s based overseas, you could have the financial means to go and get that treatment you’re after.” says Lisa.
“I’ve literally had clients with trauma cover cry on the phone when they realise they’ll be able to afford the best treatment money can buy,” adds Lisa.
Did you know…? Trauma cover generally only covers you to the age of 70. Most insurers will not offer trauma cover for anyone aged over 61. This is to protect insurers as the risk of cancer increases with age.
Top tip: you can also take out Income Protection insurance as well. This could cover up to 70% of your income if you need to take extended time off work for treatment.
What happens if you need trauma cover again in the future?
At the time of taking out the cover, you have an option to select “trauma reinstatement”. By choosing to reinstate trauma cover, you will once again be covered for trauma 12 months after a trauma claim has been paid.
There are some exclusions with reinstating your cover. Most insurers are unlikely to cover you if you’re unlucky enough to be diagnosed with the same medical condition you already claimed. But… you would still be eligible for a wide range of other medical conditions as trauma also pays out for conditions such as Parkinson’s disease, strokes and heart attacks.
Bottom line
With cancer on the rise among younger Aussies, there’s a grim chance that more of us could be impacted. How you wish to tackle cancer is a personal choice.
Private health cover can give you more choice, but you’ll need to be aware of out-of-pocket costs.
Trauma cover can provide a financial safety net if you’re diagnosed with cancer.
Income Protection can cover a percentage of your wages while you’re off work and recovering.
If you’d like to know more about trauma cover, Lisa and the other experts at Compare Club can help.
Go deeper:
^The Cost of Care: Volume 2 by Zurich Australia
*Australian Institute of Health and Welfare (2023). Cancer data in Australia. Lifetime risk of diagnosis 2023 (projected)
Financial Disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
