Medical Insurance And The Impact Of Inflation: What You Should Know

Medical Insurance And The Impact Of Inflation: What You Should Know
Medical Insurance And The Impact Of Inflation: What You Should Know TRUic

According to statistics released by the U.S Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) rose by 5.3% in the period of 12 months. The consumer price index is a measure of the change in prices that consumers pay for a market basket of services. The CPI-U is a reflection of the spending patterns of all urban consumers versus that of urban wage earners and that of clerical workers as well, and is a representation of about 93% of the entire American population.

Elsewhere in the world the picture is not any different: The Guardian had reported stating that the high prices are a reflection of “Covid’s long economic shadow” emphasising the debt that many had incurred to prevent complete economic destruction with economists widely agreeing on the matter. Debts are said to further increase due to the government running above their tax revenues which is said to continue for the foreseeable future. In March 2021, corporate debt was at a staggering 102% in comparison to the 92% that it saw prior to the global pandemic. The bulk of this increase stems from having to seek loans to cover the loss of revenue that resulted from border closures and lockdowns.

Many small businesses were unable to recover from the loss of revenue and doors of generational family run establishments and startups alike were forced to close. Those that were savvy enough to have business insurance were able to stay afloat or at the very least prevent major debts due to the protection that they had insured. However, most businesses were still forced to hike up prices as supplies and operational costs increased which ate majorly into profits.

In order to make up for the gap in revenue streams, the costs will ultimately have to be paid by the everyday consumer, as taxation, transportation and total living expenses increase the money left over is not much. A story in the New York Times depicted the grime picture of the dire straits that citizens are now in. The article reported on a 27 year old female with a heart condition that was forced to quit her job, despite just receiving a promotion, in order to qualify to  enroll in Medicaid, which will then cover all of her medical expenses.

Despite being offered a full time position which would allow her to qualify for her company's health plan. Her own personal contribution would amount to around $1,200 each month, this equated to around double the amount of money that she would have left after paying for all of her rent and utilities. Which is why there was no other option than to quit her job in order to receive the necessary treatment for her heart condition. This story is just one of so many, and ultimately tells a tale of how inflation has impacted the working class to the point where they are now having to choose between medical insurance and their livelihoods. 

Employer and employee contributions towards a family plan now exceed that of $20,000 per annum on average. With workers contributing around $6,000 to the payment. Over a quarter of the total number of workers covered and close to half of those that are working for small businesses are said to face an annual deductible of $2,000 or more, this is according to the New York Times.

Debates on whether to do away with the role of private insurance in the American health system and expanding the option of the federal medicare program to all citizens are a major topic amongst government officials. However, in a recent poll conducted by the Wall Street Journal and NBC news saw that a majority of 56 percent of registered voters were opposed to the notion of a government-run system such as “Medicare-for-all” which would replace private insurance. 

This result could therefore be seen as a schism between employees that are provided with good employer coverage and those that are not. Many employees are faced with the task of having to decide if they should increase the portion of the deductible or follow through with having to increase the employee’s share of the premiums. Either way the cost of quality health insurance leaves a sick feeling amongst a large number of citizens.

With the vast majority trying to manage paying for medical insurance, they often do not have the funds left over to get cover for life insurance. This leaves what would have been their beneficiaries in the lurch should there be the unfortunate case of premature death. This causes a vicious cycle as children do not just lose a parent but also the funds that could have helped pay tuition bills and contribute to their own well-being. They then either have the choice of going into debt with student loans or having to forgo furthering their studies altogether.

Final Thoughts 

Medical insurance and life cover is such an important aspect to not only protect oneself but also those that matter in the case of an untimely demise. Unfortunately due to inflation and the current financial situation, the United States as a whole is in need of an influx in revenue in order for the government to continue funding the day to day expenses of the country. This cash flow needs to come from somewhere and that is the pockets of the citizens of the country. 

The impact of Covid-19 contributed largely towards the hike in inflation and saw many small businesses close and large corporations were forced to downsize and let go of numerous employees. 

Citizens are now not only paying more towards the government but also to carry out everyday tasks. Things like medical insurance and life cover have gone from essential necessities to luxuries that not everyone can afford despite the fact that it is an essential need to ensure quality health care and the comfort of dependents. This saw some people having to leave their jobs and a chance to develop a career just so that they were able to get life saving treatment via the government's Medicaid. 

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