Cost of being sick in lost wages and medical bills

Hospital stays are costly. Not only will the cost of the medical care received be expensive, but most people who go to the hospital will not only miss income from the time they stayed there, but they also tend to miss future work and they often even have a permanent reduction in income. Heck, I have been under the weather/sick/allergies these last several days and it is not a good feeling. I can see how a serious illness and being in the hospital can definitely hurt a households income.

The older you are when you get sick, the more likely the reduction in income will be permanent according to a report from Northwestern University. In addition to that challenge of a lower household income, medical bills account for a third of the bankruptcy filings in the United States.

Loss of income after leaving the hospital

The report focused on people in their 50s, but some of the underlying trends also relate to younger individuals as well. For someone in their 50s who gets sick, their income is 20% lower on average 5 years after their hospital stay. It also tends to stay at that new, lower income level.

This means that if someone in their 50s was making 60K per year, their income will decrease to the high $40,000 or low $50,000-dollar level. That is a significant hit to the household. Note, a key definition here is average income level.

Average means the impact to different people can be enormous. So, if someone totally drops out of the workforce after their hospital stay, and say their income goes to zero dollars per year, that will bring down the entire average quite a bit. The study estimates that 60% of Americans in their 50s who leave the hospital never go back to their same job, with a large percentage of them no longer working at all.
Or if someone goes on SSI disability due to their sickness, the average income there is much lower so that will bring down the average. But we are sure there are quite a few people who go back to the same job at the same income levels after leaving the hospital.

The study can not provide the exact reasons for the reduction in income, but we can speculate. As you get older people naturally slow down, especially in America where about 35% of Americans are obese per the CDC. If someone is living an unhealthy lifestyle, and get sick when they age, it is much harder to recover from. Maybe they miss the promotion at work due to their lifestyle/stay, they can’t deal with the job they had once before, or they have other challenges.

Medical bills after hospital stay

The difference between hospital bills post stay and loss of income is that the bills are one-off expenses and income reduction is permanent. We are not downplaying the cost of a onetime hospital expenses from being sick, but in the grand scheme of things that is more recoverable then no longer having any wages coming in the door at all. There are even programs that help pay hospital bills.

After leaving the hospital, one of the key difference in how much debt people have is whether they are insured or not. If the patient had medical insurance, their bills will average about $300. The uninsured, which is currently above 10% of the population, had an average hospital bill of $6000. We think those numbers are very low as 6K does not even pay for one day/night in the hospital. But then again, both groups were shown by the Northwestern Report to use hospital charity care programs, free clinics, and other steps which could partly explain the lower dollar amounts.

The point is that getting sick or injured, and going to the hospital, can be very costly and hard for people to recover from. They are faced with both one-time bills as well as permanent reductions in their household incomes.

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