Nearly half of Canadians facing major illness struggle financially: poll

Two out of five respondents said finances were tight after a serious health event or diagnosis


 

TORONTO – Nearly half of Canadians facing a major health incident like cancer or a stroke are struggling financially as a result of their illnesses, according to a report from Sun Life Financial.

The company’s annual health index found that 40 per cent of those surveyed earlier this year reported feeling financially strapped after a serious health event or diagnosis, while 53 per cent of 45 to 54 year olds have been hit hard by unforeseen health care costs.

While a majority of Canadians realized that a serious health event could impact their personal finances, only 13 per cent said they had money set aside for uncovered health care costs.

“People don’t necessarily see themselves as being at risk for a major health event, it’s not something you want to think about,” Kevin Dougherty, president of Sun Life Financial Canada (TSX:SLF), said in an interview.

“As well, people maybe have a feeling that the health care system is going to look after them … (but) a lot of the care that you need at home and in recovery is not necessarily covered by the public system.”

One of the problems, the report found, was that too many Canadians underestimate out-of-pocket health costs, especially when it comes to prescription drugs.

Even though these are covered under company health plans, most people still have to pay a percentage of the cost themselves. Yet only 54 per cent of respondents said they expected to pay some amount out-of-pocket for their prescriptions.

Over the past 12 months, Canadians spent an average of $1,354 on medical or health care products and additional services, Sun Life found. But few set aside money to cover health costs, with more than 81 per cent putting nothing aside.

Among those who did, 43 per cent saved less than $1,000 in the past year and 44 per cent saved between $1,000 and $5,000.

There are also too many people — one fifth — with no group insurance, personal insurance or health expense savings to help absorb the shock.

Sun Life found that out of those impacted by a personal health crisis, 22 per cent turned to credit cards or personal lines of credit, another 22 per cent tapped into personal savings, 12 per cent borrowed from a loved one and five per cent were forced to either remortgage or sell their home.

Dougherty said such choices added to people’s stress levels as they battle a major illness, with 77 per cent reporting they experienced excessive levels of stress, up five percentage points from the previous year, with finances as the most likely cause of excessive stress across all age brackets.

While the 45 to 54 year-old group faced the most financial pressure, generation Y bore the larger stress burden, at 84 per cent.

“You’ve got this immediate stress that’s playing out for the person, but once they’ve gotten through to the other side they’ve really derailed their retirement plans,” Dougherty said.

“That’s all part of the stress picture as well.”

Despite the high ratings for stress, the poll found Canadians were feeling good about their physical and emotional health overall.

The index reached a record high of 65.9 this year, up marginally from last year, and 4.7 per cent higher than the low recorded in 2011.

The Sun Life Canadian Health Index was based on the findings of an Ipsos Reid poll conducted between May 10 to 24, with a sample of 2,400 Canadians from 18 to 80 years of age interviewed online.

The health events discussed in the survey included heart attack, stroke, cancer, coronary bypass, chronic diseases, degenerative disorders, terminal illnesses and serious accidents, with 28 per cent of Canadians saying they’ve experienced a serious health event or an accident in their lifetime.


 
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Nearly half of Canadians facing major illness struggle financially: poll

  1. “One of the problems, the report found, was that too many Canadians underestimate out-of-pocket health costs, especially when it comes to prescription drugs.”
    Sun Life (and other insurers) are at least partially responsible for this. A couple of years ago, I switched from my ex’s coverage to my company’s extra-cost “full coverage” plan, which was supposed to cover 100% of “most prescription drugs” provided by Sun Life. As my ex’s policy had also been a full-coverage policy with Sun Life and all my medications had been covered, I was quite surprised to discover that half of the drugs covered at 100% under the old policy were only covered at 80% under the new.
    These are standard, fairly low-cost diabetes and cholesterol drugs – but they saw fit to schedule them. Much to my surprise and chagrin – I hadn’t factored that increase in medical costs into my budgeting when we drew up the separation agreement & I moved out. It put a real dent into an already painful financial readjustment.
    As far as I am concerned, advertising a policy as “100% coverage” and then delisting about half the standard drugs is false advertising and deceptive practice. My company claims to be working with Sun Life to address this but so far nothing has changed.