COVID-19 Long Term Financial Effects

BG9

Apr 6, 2020 at 10:15am

I know we're all focused on social distancing and the healthcare issues of this disease.

But lets talk about the dire long term financial and employment effect.

Employment. Many are laid off, especially those in the hospitality, restaurants and retail stores. Many other work from home. But how long will that last? Highest management will want to cut costs. There will be reevaluation of needs - software, marketing, back office. Layoffs will follow.

What do you do after you're laid off? Pay for your own health insurance or hope you get a new job before sickness strikes? Sign up for Medicare, which you can do anytime, but they won't pay until your assets are depleted down to about 15,000 (depending on which state you live in).

If you don't have insurance and you get the virus and require a hospital stay expect to pay about 40,000 if you don't need critical care. A lot more if intensive care is needed. The nations medical cost can be extreme if 200 million get infected with 20% needing hospital care.

Which brings up bankruptcies. We can have millions of families filing for medical bankruptcies. We may also see many credit card and loan defaults. We'll see many foreclosures causing a very depressed housing market, a glut of foreclosed houses.

The federal government should have committed to paying all COVID-19 medical costs. Not doing so will lead to a cascade of severe economic effects much worse than the cost of having covered all.

As for the insured, insurance will cover most. You may get hit with co-pays, deductibles and sneaky out of network costs. The issue is insurers will be hard hit. Expect humongous premium increases. What will corporations do? Cover it or say we've had enough of this? This will also affect social security recipients. Their 2020 medicare cost is 144.60. Should it, for example, go to 170 then they can expect to see no in pocket increase for several years.

The there are pension issues. Many pension funds are heavily invested in the market. Can they hold up?

kthnry

Apr 6, 2020 at 11:13pm

BG9 said:
What do you do after you're laid off? Pay for your own health insurance or hope you get a new job before sickness strikes? Sign up for Medicare, which you can do anytime, but they won't pay until your assets are depleted down to about 15,000 (depending on which state you live in).

You're thinking of Medicaid. You have to be over 65 or disabled to be eligible for Medicare.

In a lot of states, only children, parents/caretakers, and the disabled are eligible for Medicaid. No coverage is available for low-income adults.

But yes, it's pretty grim.

drummerboy

Apr 7, 2020 at 12:16am

BG9 said:

The federal government should have committed to paying all COVID-19 medical costs. Not doing so will lead to a cascade of severe economic effects much worse than the cost of having covered all.

The devil is in the details, but Trump has said that the costs of COVID treatment for the uninsured would be covered by the rescue act.

Formerlyjerseyjack

Apr 7, 2020 at 7:29am

drummerboy said:
The devil is in the details, but Trump has said that the costs of COVID treatment for the uninsured would be covered by the rescue act.

That is nice but how many people know this? How many uninsured will avoid seeing a phys because they don't know the visit is covered? AND is it really covered?

drummerboy

Apr 7, 2020 at 7:46am

Formerlyjerseyjack said:

drummerboy said:
The devil is in the details, but Trump has said that the costs of COVID treatment for the uninsured would be covered by the rescue act.

That is nice but how many people know this? How many uninsured will avoid seeing a phys because they don't know the visit is covered? AND is it really covered?

all valid points.