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Half of all men and one-third of all women over 65 will be diagnosed with cancer before they die. Even with the best Medicare plans, the average out-of-pocket cost for a cancer patient is $26,700!

Those with Medicare Advantage plans have even more out-of-pocket costs. This video shows you what you can expect to pay and how to protect yourself.

Chemotherapy and some of the other cancer drugs are covered under Medicare Part B. If you have a Medicare Advantage plan, your first financial risk is the direct cost of chemotherapy and other Medicare Part B services, as you are responsible for 20% of the cost up to your annual maximum out-of-pocket expense in any calendar year.

If you decide to seek out-of-network coverage by traveling to a clinic that specializes in cancer treatment, your financial obligations will include your out-of-network MOOP (which may be $10,000 or more) plus travel and lodging expenses.

If you have a Medicare Advantage plan, expect $14,000 to $20,000 minimum in direct expenses related to Medicare Part B charges for cancer treatment. Expect more if you want the flexibility of traveling to a specialty clinic.

If you have Original Medicare, your out-of-pocket direct expense will be limited to your Medicare Supplement coverage and can be as low as zero. However, you may still have indirect expenses to cover costs of traveling to a specialty clinic.

In both cases, these are direct costs do not include Medicare Part D prescription drug costs which we will cover next.

Because your maximum annual out-of-pocket expense cap resets every January 01, it’s wise to consider two times your MOOP as a possible maximum expenditure for

I would like to note if you are a Florida resident and considering Medicare Advantage plans, there are two Regional MAPD PPOs available to you that allow for in-network coverage at some of these specialty cancer treatment facilities in other states like the MD Anderson clinic. That way you can get service from one of the top cancer treatment facilities in the country and still be limited to your in-network spending cap. This is also the case with select Regional PPOs in other states as well. Please contact me for more information.

Medicare Part D and the cost of cancer treatment

Medicare Part D is that portion of Medicare that covers prescription drugs. These are the medications for which your doctor has written a prescription and expects you to purchase the medication at a pharmacy and self-administer.

If you have Original Medicare you should have a standalone Prescription Drug plan that is separate from your Original Medicare and from your supplement.

If you have a Medicare Advantage Plan you probably have a bundled Medicare Part D plan that comes with your Advantage plan.

In either case, the costs associated with Medicare Part D prescription drugs is completely separate from any other plan. These costs are NOT a part of your Medicare Advantage MOOP limit. To be clear, Medicare Part D prescription drug costs are exempt from and in addition to your Medicare Advantage annual maximum out-of-pocket limit. There is no maximum out-of-pocket limit on for prescription drug costs.

However you have your Part D plan, you will pay coinsurance for your cancer-related prescription drugs. That co-insurance level will be different with each plan. It will also change once you have reached a set maximum of out-of-pocket expenses called the donut hole and after that catastrophic coverage.

I don’t want to get into the details of the donut hole in this video for two reasons. First, the levels of your out-of-pocket expense in reaching the donut hole and catastrophic coverage will change every year until 2020 when the donut hole will be eliminated. Second, if you have cancer the odds are your prescription drug costs will quickly exceed the donut hole and reach catastrophic coverage. Sometimes in the first month.

For 2016 catastrophic coverage is reached when you have $4,850 in out-of-pocket prescription drug expenses.

At catastrophic coverage, you still pay for your prescriptions. But you pay only 5% of their cost or a co-pay depending on the prescription.

According to the Journal of Oncology Practice, in a May 2014 publication, the average cancer patient (not just those on Medicare) pay out-of-pocket between $20,000 and $30,000 for prescription cancer drugs.

According to the Kaiser Family Foundation research on Medicare, it’s common for a cancer patient with Medicare to pay between $7,000 and $12,000 in prescription drugs. Some pay as much for each of several prescriptions. Most of that cost is incurred after they have reached catastrophic coverage triggers.