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Can You Afford The Coronavirus?

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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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{ 36 comments… add one }
  • Kayla @ Family and FI March 8, 2020, 3:31 pm

    We’ve had at least one case here in Tennessee. It’s certainly better to be over prepared than not prepared at all! I hope everyone here stays healthy!

  • drplasticpicker March 8, 2020, 6:18 am

    Joe. You should watch Contagion. I’d love to see your thoughts after that! Seriously though. If everyone could wash their hands and practice a bit of “social distancing” that would help. We have cancelled our households travel plans for the next 2-3 months to help contain spread. I’m bowing to patients now instead of hand shaking. Feels super natural. Good luck! Sure your brother can score you a stray N95

    • retirebyforty March 9, 2020, 11:20 am

      That sounds like a scary movie.
      My brother can keep the N95 masks. He needs it a lot more than I do. He is an ER physician…
      Good luck to you as well.

  • WTK March 7, 2020, 7:02 pm

    Hi Joe,

    My take is that life is full of unforseeable events. The only way is to prepare as adequately as possible and handle the situation with the peace of mind,

    WTK

  • Lee March 6, 2020, 2:04 pm

    Thanks so much for breaking the cost of the virus even more in order to prepare! I agree with the idea that healthcare should be accessible to all when someone is sick without fearing what it will cost. We have some relatives in Korea, and it has worked great over there for them!

    • retirebyforty March 9, 2020, 11:17 am

      It looks like the government is going to help with the test kits. Hopefully, patients can get some kind of rescue package if they have to stay in a hospital. How many people can afford that?

  • Jim @ Route To Retire March 6, 2020, 10:35 am

    We’ve been lucky so far being in Panama where there aren’t any known cases just yet (though they now have one confirmed in Costa Rica). That said, I’m going to start taking precautions now before the @#$% hits the fan. I’ve started to stock up a little bit on supplies and want to do a little more while there are plenty of goods in the stores.

    Scary world right now – hang tight!

    • retirebyforty March 9, 2020, 11:16 am

      The case counts are going up in South America. Buy some TP…

  • Sally March 6, 2020, 10:02 am

    I’ve built a nice big bunker in the backyard. Stocked it up with food and supplies. I’ve sold all my stock two weeks ago and will remain in hiding until the PF blogs declare it’s safe.

  • Lily March 6, 2020, 4:42 am

    Being overdue pregnant and on admist this Coronavirus thing was not something I planned for, how scary. But then again, out of all the batches of epidemics, this is a little less scary than Zika and Ebola that definitely have a higher kill rate for pregnancy and newborns. But it’s a really scary time for older people. I tell my elderly dad not to go out everyday but he just doesn’t listen or understand how viruses work. Everyone in Washington is pretty much encouraged to work from home.

    • retirebyforty March 6, 2020, 8:37 am

      Good luck with the birth. I hope it’s done soon before this outbreak worsens.
      Old people never listen… It’s frustrating.

  • GYM March 5, 2020, 9:14 pm

    Hah, I’m glad I’m not the only one who is a bit obsessive about it. I read somewhere that within about 1 year or two, we expect 40-70% of the entire population of the world to have had COVID-19 and you will know people who have died from it.

    The US and Canada have had low rates because of the rules related to testing. It has been interesting to see how each culture and country manages the problem. China’s rates are decreasing because they did drastic measures to control the infection- in Canada and the US where autonomy is an inherent value this will be hard to manage– just as you said someone broke their self quarantine to go to a party.

    • retirebyforty March 6, 2020, 8:36 am

      We should have a vaccine by then. Hopefully, the fatality rate will drop to 0.1% like the flue.

  • Mr. Tako March 5, 2020, 6:10 pm

    Washington state just waved the cost of testing, which IMHO is a very good thing. We’re up to 70 confirmed cases today though. 🙁

    I’m definitely in the thick of the outbreak, but I’m not too worried. Most people live! We won’t be visiting the grandparents anytime soon though… no need to take a chance on infecting them.

    • retirebyforty March 6, 2020, 8:36 am

      That’s great. It sounds like most states will do that.
      WA is testing a lot more people than OR. It feels like OR is a few weeks behind you guys.
      I hope we don’t get an outbreak like up there.
      You’re right about visiting grandparents. Best to stay away from the vulnerable population for now.

  • Angela @ Tread Lightly Retire Early March 5, 2020, 10:56 am

    Threat level at least 2.5 here in good ol’ Kirkland. Kiddo and I have mild stuffy noses and occasional cough, so we’ve been home since midday Monday. School district closings, major employers putting in work from home policies, and the center of the outbreak between our home and preschool. Our community is unsurprisingly very fixated on it at the moment.

    • retirebyforty March 6, 2020, 8:34 am

      Yeah, it’s not looking good in Kirkland. I hope you’re stocked up.

  • freddy smidlap March 5, 2020, 10:38 am

    talk about bad luck. mrs. smidlap has her art opening tomorrow night in a big public space. already one friend called to say he’s not coming over concern for the virus. i’ll be there though. we’re just doing everything like normal for now. it’s a good time to know how to cook from scratch in case we end up hunkered down i guess.

    • retirebyforty March 6, 2020, 8:33 am

      Good luck at the gallery. It sounds like the virus is spreading in NY, but you guys are a way out. Take care.

  • Lazy Man and Money March 5, 2020, 10:11 am

    I saw the title and my first thought was, “Of course, getting COVID-19 is free.” This is some great analysis though. It’s something that I hadn’t thought to break down myself. We haven’t done any special shopping, but with access to the military commissary, we can avoid most of the hoarding by the general public.

    The tax assessor in our town has request that people pay taxes online or use the drop box. There are three cases in RI and they were isolated quickly, so there’s no threat, nothing mentioned on the island or anything. Yet, I guess that person doesn’t want to have any contact with other people to even take an envelope from them. Poor post office people who don’t seem to have this choice. This is just a weird situation.

    • retirebyforty March 6, 2020, 8:32 am

      Really? I assume you guys can get MRE for a discount. How about hooking us up? 🙂

  • jim March 5, 2020, 9:51 am

    The bit about a guy being charged $3200 for a coronavirus test is apparently mistaken rumor. Theres multiple articles disputing it and explaining he didn’t get a coronavirus test and most of his cost was ~$800 emergency room bill copay. Further I’m reading the actual test for Covid19 is free via the CDC

    Still the typical high costs for an emergency room bill etc are a burden.

    • retirebyforty March 5, 2020, 9:59 am

      Thanks for the update. I’ll check again and update the post.

  • steveark March 5, 2020, 9:07 am

    Wouldn’t you know we have a planned hiking trip in Switzerland that starts out with us flying to Milan, Italy in June. I think the hysteria is way way way overblown by a media that loves a good apocalyptic story but the physical impacts on travel will be real enough. I don’t consider you to be part of the media hype at all, you aren’t preaching cats and dogs living together. At least we live in the middle of nowhere and can hunker down in the unlikely event this becomes a thing in our part of the country. But I’m thinking my $20,000 vacation is getting iffy, if that doesn’t qualify as a first world problem I don’t know what does.

    • retirebyforty March 5, 2020, 9:58 am

      Hopefully, it’ll be a lot better by June. If not, I’m sure the airline can alter the route or something like that.
      I think the number of cases will increase a lot once we do more tests in the US. We’ll see how it goes.

  • Adam March 5, 2020, 6:29 am

    We’ve accumulated $40k in a HSA over the last seven or eight years, so I’m not terribly concerned about cost; we’re both young and healthy, and can easily telecommute.

    I gave brief thought to picking up something like this:
    https://www.rei.com/product/756809/harmony-house-backpacking-kit
    $50 for 70 nutritious long-shelf-life servings seems pretty handy. Combine it with a $55 #10 can of freeze-dried meat on Amazon, and a sack or two of rice, and as long as there’s water we can probably stay alive for weeks. Then I came to my senses and realized we live in the densely-urban DC area rather than rural Montana, and if things ever really got that bad it’s already too late for us. There’s something peaceful about that. 🙂

    • retirebyforty March 5, 2020, 7:46 am

      The dehydrated vegetables look like it’ll be useful in an emergency kit.
      I think a 2 weeks kit is good enough for us. Anything longer than that, we’ll get out of dodge. Go to my brother’s house or something, assuming the road is okay…

      • Adam March 12, 2020, 7:30 am

        Here it is a week later and thanks to VTI dropping like a rock, our $40k HSA is down to $33,229. Exciting!

  • FromUSA March 5, 2020, 4:58 am

    This has been blown out of proportion! Thanks for spreading the fear, panic, and hysteria, Joe!

    The epidemic in China is almost over — the number of new cases is quickly dwindling to zero. The fatality rate is likely to be much, much less than in the 2-3% range reported since the vast majority of people who got infected never show any symptoms and don’t get sick at all and therefore are not even counted as being infected.

    The knee-jerk reaction by the Fed doesn’t help either — seriously, why the sudden large rate cut? Case and point, 90-95% of the workers in China are already back to work. Sure, there was a temporary slow down in factory output the last month, but any shortfall can always be made up by running those factories overtime. When it’s all said and done, the effects of this so-called “pandemic” on the world economy will probably be negligible.

    • retirebyforty March 5, 2020, 7:49 am

      The latest numbers from Korea suggest the fatality rate is around 0.6%. That’s much better than 3%.
      I still think Americans should prepare for it to come to their community. It’ll spread and you’ll have a hard time finding hand sanitizer. The local stores are all out now. Having a 2 weeks buffer of supplies is not hysteria. Don’t hoard 90 days worth of stuff.
      I think the Fed made the wrong move too. It didn’t seem to help much.

  • Lizzy March 5, 2020, 4:23 am

    Good post…it was informative with out being panicky!
    I completely agree. We need Medicare for All.

    • retirebyforty March 5, 2020, 7:50 am

      It looks like the government is budgeting for the coronavirus so healthcare expenses should be minimal. Why not do this permanently? People should be able to get healthcare when they’re sick. A healthy population is more productive anyway.

  • Marco March 5, 2020, 3:48 am

    “Repent, for the kingdom of heaven is at hand.” – Matthew 4:17
    OMG $3270 bill just to get tested. US healthcare system is really insane!

  • Financial Freedom Countdown March 5, 2020, 12:00 am

    Cost is more wrt your health and well-being v/s financial. Not sure how the cold and cough medicine would help.
    Agre wrt getting items now v/s waiting later. I have a good stock of everything for 3 months including N95 masks and a bunch of other things like oximeter. Hoping my readers used my list and stocked up cause I see it getting a lot worse before it gets better.

    • retirebyforty March 5, 2020, 7:51 am

      Cough medicine should help if you have mild symptoms.
      3 months is a bit too much, IMO. Let me drop by and see what’s on your list.

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