Household losses when diagnosed with cancer
After being diagnosed with cancer, little thought is given to the impact on household assets and the household's financial portfolio while facing a higher mortality risk. Economic theory predicts that cancer survivors will exhaust their wealth in such a way as to meet their immediate financial needs for treatment and hedge the risk of expected medical costs associated with recurrence. Based on this prediction, the study will examine the long-term changes in household wealth in response to a cancer diagnosis among middle-aged Americans (age 50 and older).
The Health and Retirement Study.
The study uses the years 2000-2014 to estimate a household fixed effects regression that regresses household assets on the time elapsed since cancer diagnosis.
Regression estimates were adjusted for demographic characteristics, general health status, employment outcomes, and household economic attributes, and household assets were measured by total net worth and the amount of savings held in each asset category.
The loss of household assets due to cancer was estimated to be $125,832 per household with a cancer patient.
This change is due to statistically significant decreases in investment assets, other savings, real estate capital, and business capital, and increases in unsecured debt. Also, from the +2 years from diagnosis to the remaining study period, cash and cash equivalent assets had increased by 2-28.0%. Cash accumulation was observed in both the fully insured group (multiple coverage) and the group with limited coverage (single coverage).
The results showed that households with cancer patients may lose as much as $13,832,518, although cash and other assets tend to increase as a result of saving and reducing liquidity spending due to increased expenditures from cancer treatment.
Pak, TY., Kim, H. & Kim, K.T. The long-term effects of cancer survivorship on household assets. Health Econ Rev 10, 2 (2020). Available at: https://doi.org/10.1186/s13561-019-0253-7
Summary
Since the numerical values are estimates based on research, the actual values will fluctuate greatly depending on the nature of the diagnosis and treatment, but I was satisfied with the content regarding the movement of assets held after the disease is known. It may be that the assets held after the diagnosis are sold and converted into cash to be used for treatment costs.
There are many insurances for cancer treatment, but they are limited in coverage, which is a problem.In the study, one third of the respondents mentioned that they did not have enough money to cover the costs even though they had adequate insurance, and that the costs were unexpectedly high because the treatment ranged from medication to nursing care.
It might be a good idea to talk about your intentions at least.
