Shifting cancer treatment models and the challenges of insurance claims

The rise of precision medicine has moved cancer treatment away from inpatient chemotherapy toward more precise outpatient or at-home oral therapies with fewer side effects. While this improves patients' quality of life, it also poses unprecedented challenges to traditional insurance policies that condition payouts on hospitalization.

1. The gap between medical costs and claim payouts

Although the National Health Insurance (NHI) provides baseline coverage, many innovative treatments — targeted therapy, immunotherapy, proton therapy, and others — fall outside NHI reimbursement, and their steep out-of-pocket costs can plunge families into heavy financial strain 5. According to available data, even the average payout under critical illness insurance is about NT$548,000 — stretched thin against new drugs and therapies that routinely cost hundreds of thousands, even over a million, NT dollars.

2. Disputes over the necessity of hospitalization

Because treatment models have shifted, many regimens that once required hospitalization can now be completed in outpatient settings. Insurers, however, may still require proof of "medical necessity of hospitalization" before paying claims, driving up claim disputes. One report found that disputes over hospitalization necessity rose 35% from the previous year.

3. Redefining cancer

In 2019, the Financial Supervisory Commission standardized the claim definitions for cancer insurance, classifying cancer into "early-stage, mild, and severe." While the reform improved claims transparency, it also changed how payouts are calculated. For example, stage I breast cancer that once qualified for 100% of the insured amount may now be classified as "mild cancer" and paid at less than 20% of the total insured amount. This means policyholders still holding older policies need to re-examine whether their coverage is adequate for today's medical costs.

Three major financial risks of cancer and how insurers are responding

After a cancer diagnosis, families face three major financial risks that cannot be ignored:

loss from medical expenses, loss of life value, and loss of health 

• Medical expense risk: steep out-of-pocket medical costs are a heavy financial burden for the average family.
• Life-value risk: if a working-age breadwinner dies of cancer, the family's economic structure changes.
• Health-loss risk: the physical and mental toll of treatment may lead to prolonged inability to work, or even the need to hire a caregiver — accumulated financial losses can exceed the medical costs themselves.

Facing these challenges, and guided by policy, insurers have begun adjusting their product strategies and launching innovations that better match real needs:

1. Strengthened critical illness insurance

Insurers are promoting lump-sum critical illness policies to reduce claim disputes and administrative costs. These policies provide a large one-time cash payment, giving patients quick access to funds early in their diagnosis to deploy flexibly across treatment needs.

2. Fragmented, specialty policies

To patch the gaps in traditional policies, the market now offers "fragmented" policies targeting specific high-cost self-paid items, for example:

• Cancer genetic testing coverage: a lump-sum payout that avoids repeated biopsies, saving time and physical strain.
• Cancer-specific particle radiotherapy health insurance: fixed payouts for high-priced treatments such as proton or heavy-ion therapy
• Cancer da Vinci surgery medical expense insurance: dedicated coverage for high-precision surgery costs

3. The emergence of innovative products

To cover more high-risk groups, the insurance market has also produced innovations such as:

• Substandard-health policies: designed for people in weaker health or with existing chronic conditions, with looser underwriting
• Post-cancer policies: designed for cancer survivors in recovery, covering recurrence, metastasis, and follow-up treatment, breaking through traditional exclusions on pre-existing conditions
• Property-insurer cancer drug/treatment policies: one-year coverage with simplified claims, suited to customers with specific needs.

Building a complete cancer protection net

In a constantly changing medical environment, no single insurance product can provide comprehensive protection. PatientsForce recommends that a complete cancer protection net combine multiple products into a solid shield.

• Baseline protection: choose NHI-linked critical illness insurance as the safety net, providing a one-time full payout that gives patients enough flexibility for early treatment expenses.
• Medical expense protection: add high-deductible reimbursement-type medical insurance to cover large outpatient and inpatient costs — especially valuable as outpatient chemotherapy and at-home oral therapy become the norm, filling the gaps left by traditional policies.
• Cash flow protection: a lump-sum cancer payout provides flexible funds, allowing free choice of the most effective treatment and offsetting income lost to illness.
• Long-term care protection: consider disability support insurance, whose ongoing payouts fund long-term care needs and close the financial gap created by lost working capacity.

From passive claims to proactive planning

Taiwanese consumers today commonly fall into an "age myth," carry insufficient financial preparation, and sequence their coverage planning incorrectly. The average medical protection gap in Taiwan runs as high as NT$1.12 million, showing that the public underestimates the long-term financial pressure of cancer becoming a chronic disease

Turning this around requires insurance planning that keeps pace with the times — conducting regular "policy check-ups" and helping patients and families review their coverage to ensure it can withstand an ever-changing medical environment.