Coronavirus could financially cripple many Americans

  • High healthcare costs and lost cash flow are among the most significant ways that Americans could be financially hurt by the spreading coronavirus. 
  • Uninsured patients could expect to pay at least $500-$1,000 just to get tested for the virus, and a 10-day hospital stay could amount to a bill of at least $75,000, according to one expert. 
  • Government officials and companies are trying to cobble together ways to soften the financial hit. 

Americans’ health may not be the only thing at stake as the coronavirus continues its unrelenting spread in the U.S. The virus could also prove financially crippling for many individuals.

“There are all kinds of pathways for people to be financially affected by this,” said John Graves, an associate professor of health policy at Vanderbilt University.

There are more than 114,000 confirmed cases across more than 100 countries and regions. The U.S. has more than 750 confirmed cases of COVID-19 — the virus’ official name — and at least 26 Americans have died.

States such as California, New York and Oregon have declared states of emergency, several universities have suspended in-person classes and more and more businesses are encouraging employees to work from home.

Some health experts believe the situation in the U.S. will become much more serious in the coming weeks.

One of the most acute financial strains for Americans if they get the coronavirus will be related to cash flow — the loss of a paycheck for those who can’t go to work or dramatic reductions in revenue for business owners whose foot traffic evaporates, according to experts.

The U.S. is one of the only developed countries that doesn’t require workers to get paid time off when they’re sick.

Roughly a quarter of working Americans don’t have paid sick leave, according to the Bureau of Labor Statistics. Low-income Americans are much more at risk — only 31% of the bottom tenth of wage earners get paid sick days, while 94% of the highest earners enjoy the benefit.

Further, 54% of Americans report not being financially prepared to manage a contagious disease outbreak that furloughs them for several weeks, according to Prudential Financial.

“I think the major thing is, essentially being out of work for 14 days for most Americans is a very strong financial hit that many people can’t absorb,” said Gerard Anderson, a professor of public health at Johns Hopkins University.

“If people, for financial reasons, are reluctant to go to the hospital or doctor, the epidemic can spread much faster,” he said.

Some policymakers and employers are stepping in to alleviate the financial pain.

For example, New York City will give zero-interest loans of up to $75,000 to small businesses with more than a 25% drop in sales. Darden Restaurants, which owns chains like Olive Garden and Longhorn Steakhouse, is offering paid leave to hourly workers.

The Trump administration is also weighing an economic relief measure that could include a payroll tax cut and paid sick leave.

Source: https://www.cnbc.com/2020/03/10/coronavirus-could-financially-cripple-many-americans.html

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