Can You Afford The Coronavirus?

Can you afford the coronavirus?I’m writing about the coronavirus (COVID-19) again, sorry! I’m a bit obsessed about it and I don’t have a good personal finance topic in the queue. Anyway, we had a lot of bad news over the last 10 days. The coronavirus outbreak is spreading across the US. At the time of writing, there are 158 cases and 11 deaths across 16 states! In nearby WA, they had 10 deaths out of around 30 cases. That’s a huge percentage, but most of the fatality is from the nursing home outbreak in WA. We know this virus is more dangerous to older people, so the high fatality rate is understandable. In Oregon, there are  3 confirmed cases. However, the real worry is the number of infected people could be much higher.

Previously, only people who have been hospitalized were tested for the coronavirus. Once there is a positive hit, then they’ll test people who had contact with the patient. I think Oregon tested around 30 people so far. That’s a very small number. The 3rd patient lives in Eastern Oregon, that’s a long way from the Portland area. How did he get the virus? Unfortunately, these 3 cases were spread via community infection. These folks didn’t travel so they must have contracted it in Oregon. The fact is most people have mild or no symptoms so they don’t seek treatment. Hundreds of Oregonians could have coronavirus by now.

There is a good development, though. The testing guideline was revised on Wednesday. Now, they are going to test a patient based on a doctor’s recommendation. I hope we can contain COVID-19, but I’m not optimistic. It is already spreading in several communities and we don’t have any travel restrictions in the US. I think we’ll see the number of confirmed cases growing in many communities in the coming days.

In the short term, we’ll have a lot of bad news. That’s why you need to start planning even if there are no local cases yet. Unfortunately, preparing for the coronavirus is going to hit your budget. Today, I’ll share our plan and the different threat levels that will trigger each step. You should think about it too. Can you afford the coronavirus?

Threat level 0 – no local cases

Most communities are at Threat level 0. For now, only a few communities have detected the coronavirus locally. However, it might still affect you. If you plan to travel to locations with coronavirus outbreak, then you might have to cancel the trip. Hopefully, the cancelation won’t cost too much. Some airlines have already waived the change/cancellation fees to the hot zones so most of us will get off easy. I planned to visit my parents in Thailand this summer, but that’s off the table for now. Luckily, I didn’t book anything yet so I don’t have to deal with cancellation.

If you insist on traveling to Italy, Iran, or South Korea, then be aware that you might pick up the coronavirus while you’re there. Also, you might get quarantined on the way back. The policy can change at any time. Anyway, I hope you’re at this level and stay there.

Cost TLV0: most likely $0

Threat level 1 – coronavirus in the community

Whoa, it got real very quickly. A week ago, there were no cases in the Pacific Northwest. Suddenly, we have over 30 cases in Oregon and Washington. The closest coronavirus patient lives just a few miles from our home. This is bad news, but we might be able to contain it. We’ll have to keep a close eye on the news this week.

However, now is the time to spend some money. If the case count increases significantly, there will be a run on essential supplies. Even with a few cases, I already experienced some hoarding behavior. The cheapest soap and disinfectants have vanished from the grocery store shelves. Other products are starting to disappear too.

Normally, we don’t stock up a lot of stuff. Our home is small so we go shopping every week. Unfortunately, we’ve been busy with life and we don’t have an emergency kit. I’m sure it’s the same story with many households. Everyone is super busy these days. Who has time and money to prepare an emergency kit? Anyway, I went to stock up on a few things last weekend. If there is an emergency, we probably could last 2 weeks with minimal excursions outside. Here is the list of what I wanted.

  • Food and drinks – I got a bag of rice, some dry beans, frozen vegetables, pasta, pasta sauce, canned meat (tuna mostly), tea, coffee, and ramen noodles. We eat all these regularly so they will be consumed eventually. We just have a bigger buffer now.
  • TP – I picked up enough TP to last a few weeks. TP is the thing people get fixated on when the coronavirus comes to town. Even if you don’t think you’ll need a lot, get some before they’re all gone. We will use them all eventually so they won’t go to waste. (Hahaha, toilet humor…)
  • Hand soap – Cheap hand soaps are disappearing quickly. If you wait too long, you’ll have to get those expensive fancy soap.
  • Disinfectant – I looked for hand sanitizer, but they were long gone. I’m not too worried about this one. At home, we have some hand sanitizer and isopropyl alcohol. I think that’s enough. It’s better to wash your hands anyway. Also, disinfectant wipes are gone.
  • Face masks – I thought about it, but it sounds like they’re not really helpful. I might pick up a pack or two later. It’s not a big priority. The masks will be better used by healthcare workers. The CDC does not recommend wearing a face mask unless you’re already sick. It will prevent the spread.
  • Cough and cold medicine – I picked up a few items in case we get sick.

For this level, I think you need to get ahead of the curve a bit. Once the coronavirus hits town, you won’t find any hand sanitizer or face masks. Get them while you can, but avoid hoarding.

Cost TLV1: $100 to $300

Threat level 2 – minor sickness in the household

This one is really annoying. A minor sickness can turn into a big deal in the current environment. Our son has a cough and he stayed home for 2 days this week. Normally, I’d send him to school, but we kept him home this time. He’s still coughing (no fever), but I decided to let him go to school on Wednesday. The teacher or the nurse can call me to go pick him if it’s too bad. His teacher said over 10% of the kids were out sick on Tuesday. Normally, kids with minor ailments are sent to school, but paranoia encouraged them to stay home this week. (The nurse called and I went to pick him up early. He was coughing too much and got sent home.)

So figure out if you can work from home or take time off in case someone in your household gets sick. This isn’t easy. Many workers don’t get paid if they miss work. The bills still need to be paid so Americans tend to go to work even when they’re sick. This one depends on your workplace. It could be expensive, or just an inconvenience. As for me, I don’t get anything done while my son stays home. He’s very distracting.

Also, your workplace could close down with very little notice. One of the patients in OR worked in a casino. That casino is shut down for cleaning. Another one worked at an elementary school. That school is also closed down. All those parents need to figure out how to provide child care for those kids. Would you get paid if your workplace shuts down?

Cost TLV2: $500 to $5,000

Threat level3 – possible contact with coronavirus

About 1,000 people have been asked to self-quarantine in New York. That’s two weeks at home. Can you handle it financially? Some workplace has unlimited sick days, but most don’t. Once you used up your sick days, the money comes out of your pocket.

Also, most people aren’t used to being quarantined for 14 days. A New Hampshire man attended an invite-only social event (party?) despite being told to self-quarantine. Can you really stay at home for 14 days? I’m not sure we can. What if we ran out of TP? A little walk to Trader Joe’s will fix that. Hmmm, my symptoms are mild so it’ll probably be okay. This is how the virus spreads and why people are super paranoid. That’s assuming the store has any TP left. I saw people topping their carts with TP at Walgreen when we stopped by to look for hand sanitizer (no luck.)

Cost TLV3: $2,000 to $10,000

Threat level 4 – you might have coronavirus

Bad news, you have a fever and you’re coughing your lungs out. What do you do? I guess I’d call my doctor and see what she says. I assume she’ll direct me to a big hospital so I could get tested. After that, we’ll wait a few days to see the result. Meanwhile, self-quarantine at home or stay at depending on the severity of the symptoms.

  • Coronavirus testOne man got a $3,270 bill for getting tested. $1,400 after insurance…  (This might not be true, but there are more stories at MarketWatch. Apparently, it depends on your insurance and what state you live in.
  • Emergency room/hospital visit – $100 co-pay?
  • A few days of hospital stay – around $4,000/day
  • Uber – $30. Good luck rideshare drivers…

Cost TLV4: Could be over $10,000

Threat level 5 – You got COVID-19

This is it, the highest Threat level. If you’re lucky and have mild symptoms, you’ll self-quarantine. The bad news is your family will have to be quarantined too. That means double the loss of income if both people work. If you’re sick, you’ll be isolated at the hospital. Then the cost will really explode.

  • Hospital stay – around $4,000/day
  • Oxygen – estimate $1,000/day
  • Experimental antiviral cocktail – $10,000? Can you even get them in the US? In Thailand, they seemed to have found an effective antiviral cocktail. You probably can’t do it here in the US. They used HIV medicines lopinavir and ritonavir in conjunction with oseltamivir, an anti-flu medication.
  • Pneumonia Treatment – ??

Unfortunately, millions of Americans don’t have insurance or they have a high deductible plan. This kind of bill will bankrupt them. If the coronavirus cases shoot up, lots of people will be in huge financial trouble. Just the thought of paying this much would stop many sick people from going to the hospital.

I experienced this first hand when I was a kid. My parents used to run a small Thai restaurant. One day a regular customer came by and gave them a bag of “edible” mushroom. They cooked and ate them. That night, they had food poisoning and threw up all night long. I kept telling them to go to the hospital, but they refused. Luckily, they improved, but that episode left a scar on me. That wasn’t the only time either. You can read about my dad’s broken arm if you’re interested. It sucks to have no health insurance.

Cost TLV5: $10,000 to $100,000

Some good news

There is some good news. We might get some relief from the government. In NY, they’re asking the insurance companies to waive the cost of tests and treatment for the coronavirus. This is still developing news so I don’t know much about it. Hopefully, the congress will approve some kind of relief fund for the coronavirus outbreak. This is why I like Medicare for all. Everyone should be able to seek healthcare when they’re sick without worrying about money. I don’t mind paying more taxes if it means affordable access to healthcare for everyone.

Okay, stay safe everyone. Wash your hands often, don’t touch your face, and avoid crowded germy gathering. Can you afford the coronavirus? 

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.

Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.

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