US consumers losing jobs and health insurance due to COVID-19

Workers in the US are facing the daunting process of losing both their jobs and consequently health insurance as the two are often tied together, says GlobalData, a leading data and analytics company.

The country has become the new epicenter of the coronavirus pandemic, having recorded more cases than any other country. Citizens do not have a national health framework to fall back on, like other countries, but require private health insurance or face up-front payments to obtain medical treatment.

According to GlobalData’s 2019 Global Banking and Payments Survey, 69% of US respondents indicated that they had health insurance in place in 2019. The uptake of health insurance policies is lowest among younger adults – the uptake among those aged 18–24 was 55%.

The coronavirus pandemic is creating a public health crisis in the US. Lockdowns and measures to curtail the spread of the virus have led to an upsurge in job losses. Data released by the US Department of Labor indicates that nearly 6.6 million citizens registered to claim unemployment benefits in the week ending March 28, 2020. Unemployment levels are at a record high, with the number of individuals filing for unemployment benefits being nearly ten times greater than the previous record from 1982.

Beatriz Benito, Senior Insurance Analyst at GlobalData, said: “The practice of linking private health insurance coverage with a job leaves people vulnerable to not only a loss of income but also the prospect of becoming uninsured should they lose their jobs.”

As many lose their employment, fewer individuals will have health insurance or be able to afford medical treatment. Given that a significant proportion of individuals contracting COVID-19 need hospitalization and/or intensive care, the cost of medical treatment will be prohibitive to many.

Benito concluded: “Once the coronavirus situation comes under control, the lessons learned during the pandemic will shape Americans’ attitudes towards private health insurance. Provided that a universal healthcare system is not adopted in the US, it is likely that more Americans will consider having standalone health insurance policies than in the past.”

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