Long seen as a gimmick that preyed on the fears of the elderly, cancer insurance is gaining new ground by offering flexible benefits and promoting itself with heavy advertising and lobbying.
Providers of such single-disease policies may have touched a new fear among Americans: not just that they will be struck with a life-threatening illness, but that the current state of health insurance will make it impossible to afford the care they need.
Companies have used aggressive lobbying in an effort to shed their image as a bad deal and to ease state and federal restrictions. And some people are responding.
"When you have such a catastrophic thing as cancer laid in your lap, I think anybody needs a cushion," said Peggy Fincher of Jackson, Miss., who used $2,800 from a family policy to seek alternative treatments when her husband was diagnosed with prostate cancer.
Yet many critics insist that cancer policies and others that protect against only one disease are still a bad deal.
"It's a dramatic appeal to ignorant consumers," said Robert Ball, a Medicare expert in Alexandria, Va. "Supplemental insurance does have value _ but not disease by disease."
Cancer policies cover only "one-tenth or one-twentieth of your risk," even though they cost one-half of regular medical insurance, says Bob Hunter of the Consumer Federation of America.
Indeed, while nearly all states now allow cancer policies _ and several have recently dropped bans _ some still regulate the product and warn the devil is in the details.
Cancer insurance generally provides lump-sum, cash payments directly to the person covered by the policy, regardless of whether a major policy already pays for cancer treatments.
Policies will usually set aside a certain amount to pay _ such as $200 each day of chemotherapy. The money can be used instead for alternative treatment, home care or to make up for lost wages.
Throughout the 1980s, tales of elderly people stacking policy upon policy, and of companies failing to pay, prompted consumer groups to push for regulation.
Mary Lou Ingalsbe of West Plains, Mo., who had surgery for endometrial cancer last year, had medical bills topping $12,000. But when she filed claims, she received nothing.
"You don't want to have to fight just to get what you are entitled to," said Ingalsbe, who had been paying premiums for nearly 20 years. Her state insurance commission eventually reclaimed a few hundred dollars for her.
Over the past few years, companies have had some success improving their reputation with aggressive lobbying:
New York state last February lifted a 23-year-old ban on cancer insurance. American Family Life Assurance Co., of Columbus, Ga., had spent $65,000 in donations to state politicians since 1995. From 1992 to 1998, AFLAC also spent more than $300,000 on lobbying.
Connecticut lawmakers in 1996 voted to allow companies to sell disease-specific insurance, ending a 21-year ban. AFLAC spent more than $161,000 on lobbyists there from 1995 to 1997.
And in New Jersey, which still has a cancer policy ban, AFLAC spent nearly $300,000 on lobbyists from 1995 to 1997.
Federal regulations also have been loosened. Congress in 1994 dropped a ban on the sale of benefits that overlap with Medicare. Instead, policies were required simply to carry a warning that supplemental policies must pay even if they overlap.
Then in 1996, Congress in a little-noticed amendment to massive insurance legislation _ the Kennedy-Kassebaum bill _ changed the language on disclosures, softening it in consumer groups' view.
"What we have seen is a gradual erosion over the last five years of the protections seniors have," says Gail Shearer of Consumers Union.
AFLAC has given hundreds of thousands of dollars since 1993 to key members of Congress, including Rep. Michael "Mac" Collins, R-Ga., who introduced the Kennedy-Kassebaum provision.
AFLAC and other companies, however, say the new labels simply clarify that cancer policies must pay.
And even as they lobby, the companies also "are helping to clean up the game," said Jim Czesak of HCM Benefits Inc., of Torrance, Calif., which advises businesses on employee benefits.
Companies are forced to create better policies because of increased competition and state rules on "loss-ratios" _ the amount in premiums that should be paid in benefits, Czesak said.
And they're branching into new types of marketing.
Rewards Plus of America, a Baltimore business that assembles benefit packages for companies to offer workers, recently added cancer insurance. Workers can have premiums deducted from paychecks. And Discover Card Services began enclosing ads in mailings to card members in April.
The field is growing "either due to concerns about reduced reimbursement through major medical plans, or lack of flexibility of managed care," said Kathelen Spencer, spokeswoman for AFLAC, which sold nearly $98-million in new policies in 1997 with annual premiums from $250 to $350.
Indeed, most people polled this year want HMOs _ now the dominant type of health insurance _ to provide broader coverage, including for specialists.
Even though more states permit cancer policies' sale, they still worry about consumer confusion.
Connecticut requires agents to point out that cancer insurance is supplemental.
In Arizona, customers 65 or older must sign a form that they understand it may duplicate Medicare. California prohibits cancer policies' sale to those over age 65 altogether.
And Washington state's insurance commission spokesman warns that though it's allowed, cancer insurance is probably not a "smart bet."