The COVID-19 pandemic is having a lasting effect on households across America, and there are steps you can take to help yourself and your family navigate this trying time. Learn more about the devastating impact this crisis is having on households across America and what steps you can take to ease yourself through it.
The COVID-19 pandemic has dealt a severe blow to both the economy and nation’s finances. In the United States, job losses have been particularly devastating.
During the initial year of this outbreak, India experienced a loss of more than 255 million full-time jobs – including those in informal economies, youth and women.
As the economic effects of the pandemic spread, many began to fear for their personal financial security. This fear has been linked with worse mental health outcomes such as depression, anxiety and mood disturbances.
Overall, the economy has recovered somewhat; however, this recovery was not widespread across all industries. Particularly, leisure and hospitality businesses experienced significant shortfalls.
The COVID-19 pandemic presented a new set of challenges to the unemployment insurance (UI) system. This federal program provides assistance to millions of workers who lose their jobs annually due to no fault of their own. Generally, more adults receive UI during recessions and fewer during economic expansions.
During the COVID-19 pandemic, unemployment benefits were extended to cover more people and for longer periods than usual. These benefits provided a major stimulus to the economy as they helped offset income losses and stimulated spending among all UI recipients.
In addition, Universal Service Insurance coverage was extended to certain groups of workers previously excluded from UI benefits – such as self-employed individuals and temporary workers. This broader coverage led to higher spending among all UI beneficiaries and improved the system’s efficiency in the short run.
Costs of health care
The COVID-19 pandemic has had a devastating effect on the economy. Millions of people have been affected by the virus, and the United States has had to spend billions in direct costs in order to combat it.
According to the 2020 National Health Expenditures report, national healthcare spending increased 9.7% in 2020, bringing total health care expenditures up to $4.1 trillion.
Household health care spending (26% share) increased 1.1% in 2020 after rising 4.4% in 2019, as employer-sponsored health insurance premiums decreased 3.6% and out-of-pocket spending (36%) increased 2.9%.
Hospital spending was a major driver of national health expenditures in 2020, rising 6.4% year-over-year from 5.7% growth in 2019. Federal government’s share (36%) was due to funding for Provider Relief Fund and Paycheck Protection Program loans as well as increases in federal public health activity. Medicare’s share (3.4%) decreased from 7.5% growth in 2019, while Medicaid saw significant growth at 9%.
The impact of the COVID-19 pandemic has been far-reaching, having a lasting effect on both personal finance and economic activity. The disruption caused by this crisis has caused growth to slow, stressed the financial system and made it difficult to plan ahead for the future.
The pandemic’s effects are most acute among low-income countries and those with lower disposable incomes, who are particularly vulnerable to economic shocks. Even in high-income nations, however, the disease has further widened the gap between those who have and don’t.
Recent survey findings by the National Coalition Funding Our Future and payment technology company DailyPay reveal that many Americans are worried about how they’ll meet their financial obligations if the COVID-19 pandemic continues to disrupt their lives. About three quarters of employed adults said they often worry about saving enough for retirement (38%), paying bills/debts (36%), health care costs for themselves and family (35%), taking a pay cut (29% of employed adults) and losing their job (23% employed adults).