If TPKoC wasn’t incredibly lucky medical leave would have completely jeopardized his family’s financial outlook. Presently, TPKoCs wife is recovering from a surgery that requires 2 months of recovery. This lead TPKoC to ponder the questions of Universal Health Care, Paid Medical Leave and his favorite subject – cars.
Two months out of work. There went the down payment for the car – almost immediately.
In fact a large number of bankruptcies are caused by a medical problems (62% According to this article). It would be the same for TPKoC if it were not for a lucky set of circumstances.
Luck runs in TPKoCs history, but sadly this is not the case for everyone.
Sometimes a thought experiment makes things clear.
There are some premises that should be covered.
- People will work on average 4 or 5 decades. + 2.5 decades for education means that people in the USA work until they 65 or 75 years old.
- There will be at least 2 points in time when a worker will be unable to work due to medical reasons each lasting two months or more. Being involved in a car accident can never be predicted and the sudden onset of any number of medical problems cannot be predicted, either.
- Regardless of the wisdom of this practice the typical financial home does not have a buffer of two months of bills. TPKoC knows that in the present era family there are so many expenses and so few incomes that not being able to maintain two months salary buffer in the bank is not necessarily practical. Drops in wages due to employers inability to pay increases in wages on an annual basis also cause problems for the employed people of the USA.
Case 1 (The way things are at present):
Bob is married to Sue. Both work. They have two children. Regardless of their salaries it always seems like there are just slightly less expenses than there is income coming in (and sometimes a lot more expenses than income) to the household. Bob encounters a medical problem and is out of work for two months. They normally share duties with the kids, but Bob is mostly incapacitated and one of their children is below school age and in day care.
Sue has to take leave from work to help attend to Bob and remove the high cost of day care from their expenses. They don’t have a buffer of two months expenses. While both are on leave or FMLA neither gets salary. There is no unemployment either as both are still technically employed by their present employers.
Almost immediately, Sue begins to pick and choose what bills to pay. While it appears to be a relatively brief period of time it impacts their finances for many years to come. Their credit ratings have been reduced and their debt load becomes harder to carry. In a last ditch effort to save their finances they file for bankruptcy to save the house months after Bob’s recovery from surgery. They managed to save the house; however, their finances are such that their children have much less resources to go to college. This in turn affects the incomes of the subsequent generation as well. The purchasing power of the present family and the future families has been reduced.
Bob and Sue have much lower buying power for an extended period of time. This reduces the chances of them buying cars and other large goods that help keep the economy growing at a steady rate. Due to the way their health insurance worked (underinsured) hundreds of thousands of dollars in medical costs were unfortunately not covered.
End Case 1.
Case 2 (Universal Healthcare and Paid Medical Leave):
(First paragraph same as Case 1 – context for the situation)
Bob is married to Sue. Both work. They have two children. Regardless of their salaries it always seems like there are just slightly less expenses than there is income coming in to the household. Bob encounters a medical problem and is out of work for two months. They normally share duties with the kids, but Bob is mostly incapacitated and one of their children is below school age and in day care.
Sue has to take leave from work to help attend to Bob and remove the high cost of day care from their expenses. They don’t have a buffer of two months expenses. While both are on leave or FMLA neither gets salary. There is no unemployment either as both are still technically employed by their present employers.
All of Bob’s medical costs are covered under universal health care. While he may be temporarily disabled he will return to the work force with his full faculties in place.
At the beginning of Bob’s medical leave he applies to the government with the appropriate documentation (or Sue does if he is mentally incapacitated). Sue also applies separately in order to care for their children and for Bob. Based on their present salary levels they are fully reimbursed for their lost wages in a timely manner.
After Bob recovers there has been no damage to his family’s finances. There is no change to the financing of Bob and Sue’s children’s college education.
Conclusion: The effects of medical problems have profound repercussions. A certain percentage of our population is in circumstances similar to the above. This creates a situation where the reduced incomes of all these families has the effect of reducing overall consumer spending. If you are worried about food or losing your house then you certainly are not buying new cars. The potential reduction of the next generations economic potential means that it is not something that can be recovered from easily. The medical costs that were not covered added financial burden to the family.
Recommendation: A loss of income from both wage earners happens to many families. In fact, if there are children and one working adult is removed from the work force, often the other has to take care of their spouse and the children making present day work at a regular job untenable. The covering of their costs while they are incapacitated plus any uncovered medical costs would mean that once the family is back to its wage earning normal they can continue buying new cars, saving for college educations and have a reasonable disposable income. On an individual family level (leaving sympathy behind) it doesn’t have an effect on the macro scale of the USA economy. However, medical problems strike us all at some point. That means there is a good chance that those medical problems are affecting a significant portion of our population at any given period of time. The effect of all of these people losing their income earning potential definitely impacts our economy.
If implemented there would definitely be a difference in our GDP between a year with Universal Health Care and Paid Medical Leave vs a year like now, without them.
There are lots of different situations that could be run through this kind of mental experiment and perhaps in the future TPKoC will go through some of them. One could only imagine being a temporarily medically disabled person that is a single parent of 1 or more children!
Still there are limits in terms of what Universal Medical Coverage should cover. Once people are in an end-of-life situation or other situation where there will not be a recovery this changes the equation in terms of the economy of the United States of America.
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