The Financial Costs of Being Unvaccinated

 I’ve been thinking a lot lately about COVID-19. It drives many of my everyday decisions like sitting outside at restaurants in 90 degree Florida weather (“I’d rather sweat than die”), events that I choose not to attend, and interactions with other people.

I recently posted the message, below, on all of my social media channels to implore people to get vaccinated. It tells the true story of an unvaccinated person who recently died. Many people followed up with words like “sad” and “unnecessary.”

According to the Kaiser Family Foundation (KFF), COVID-19 hospitalizations in June and July cost the U.S. health system over $2 billion dollars! Most were unvaccinated individuals. Being a certified financial planner®, I started to wonder what costs COVID-19 patients, themselves, were incurring and decided to research the financial costs of being unvaccinated.

My thinking is that this information could motivate some people to get vaccinated. At the risk of touching what can, unfortunately, be a politically-charged topic, even one life saved is a victory!  An analogy is that many smokers will not be motivated to quit by seeing the long-term cost of cigarettes, but a few might be. 

Below are 10 potential expenses for people who remain unvaccinated without a solid medical or other legal reason to do so.

Full Disclosure: It should be noted that some- but not all- of these financial impacts (the loss of a breadwinner's income following death, medical bills, the cost of a funeral, wealth depletion, and financially-stressed survivors) can occur whether someone who gets COVID-19 was vaccinated or not. However, the risk of incurring debt from the virus and experiencing resulting financial stress is lower when you are vaccinated because you are less likely to die or need very expensive health care. 

¨     Loss of a Breadwinner’s Income- When people die, their income stops. Period. Add in some time value of money calculations and the loss is further magnified. Using simple math, losing the income of someone earning the 2021 U.S. median income of $61,937 for 20 years is a loss of $1,238,40 of potential income, excluding raises and promotions.

¨     Loss of a Job- Employers are starting to wield “sticks” instead of dangle “carrots” to get their workforce vaccinated. Some unvaccinated workers may lose their jobs as employers announce “zero-tolerance” mandatory vaccination policies in conjunction with a required return to workplaces. Most legal experts say this is permissible as long as employers make reasonable accommodations for workers who are unvaccinated for reasons such as disability and pregnancy.

¨     No “Sick Day” Paychecks- Delta Airlines announced in August that it will limit the number of paid sick days that unvaccinated employees will be allowed to take if they contract COVID-19. It will also charge unvaccinated employees $200 monthly health insurance premium surcharges starting November 1. Other employers are expected to enforce similar policies.

¨     Funeral and Burial Costs- Average funeral costs vary by state but, on average will cost between $7,000 and $9,000. According to Federal Reserve research, 36% of U.S. households in 2020 would have difficulty paying a $400 emergency expense. Simply put, financially fragile families cannot afford a funeral without selling assets or incurring new debt.

¨     Crushing Medical and Other Debt- Fair Health reported that 15% to 20% of people who get COVID-19 and seek treatment may need a hospital stay and the average hospital stay cost is $73,300 for a patient without health insurance and $38,221 for an insured patient. Some bills for long hospital stays are well into six figures. Many waivers that initially exempted patients from out-of-pocket COVID-19 expenses have expired and patients may be “on the hook” for costs that third party insurers do not cover, including ongoing “long-COVID” medical bills that could last for years.

¨     Financially-Stressed Survivors- Unvaccinated people who are hospitalized and/or die and incur debt as a result of COVID-19 put undue financial (as well as emotional) stress on their survivors. Cases have been reported of families swamped by medical expenses, getting hit with balance billing statements despite Congressional bans, and declaring bankruptcy to escape mounting medical expenses. When unvaccinated people lack health or disability insurance or die without life insurance, the situation is even more dire for survivors, who may need to seek public assistance to get by.

¨     Wealth Depletion- As noted above, COVID-19 is expensive. While commercial payers are expected to pay some expenses, so, too, will patients and their families. Some have turned to crowd funding their medical bills on the GoFundMe website. Every dollar that is withdrawn from savings or unable to be earned due to death or COVID-19 treatment or quarantine represents a “hit” to wealth that an individual or family might otherwise accumulate.

¨     Possible Insurance Impacts- To date, the largest life insurance companies say they are not currently considering vaccine status during policy underwriting (except for those with high-risk conditions) or when deciding whether to pay a claim. In addition, vaccination status does not affect premiums for existing policies. This could change as more becomes known about the virus. Policy applicants will likely be asked if they have had COVID. As noted above, unvaccinated workers may see their health insurance premiums increase.

¨     Lack of Access to Events- The Wall Street Journal recently noted that Live Nation Entertainment, the world’s largest concert promoter, will require proof of vaccination or a negative COVID-19 test for entry at its events beginning in October. Today (September 1), the CDC asked unvaccinated individuals not to travel during the upcoming Labor Day weekend. Possible financial casualties include forgone beach house rentals, non-refundable hotel or travel deposits, and prepaid event tickets.

¨     Loss of Money-Saving “Social Capital”- Social capital is the network of relationships that people have that they can “lean on” when times are tough. Especially when people have limited financial resources, social capital is invaluable. People can drive you places, care for you or your children, and lend you money. It has been widely reported that people who are unvaccinated are losing friends. From actress Jennifer Aniston to the neighbor next door, many people do not want to be around unvaccinated friends who increase their risk of breakthrough COVID. Bottom line: people may not be there for you when you need them most.

Finally, since vaccines are free and easy to obtain, some people are questioning the costs that unvaccinated people impose on everyone in society. They are tired of experiencing “financial fallout” as a consequence of other people’s choices.

This includes taxpayers paying for Medicare and Medicaid, policyholders paying higher health insurance premiums, and those facing long waits for “routine” medical services at overwhelmed hospitals. This perspective is not unique, however. Similar comments are also sometimes made about societal costs of other "voluntary" health-related practices such as smoking.

It is now becoming more acceptable to debate, support, and even adopt, policies that mandate vaccinations, limit employer benefits, or pass along COVID-19-related costs to unvaccinated people as a way to motivate them or as a form of “punishment.” Unlike "lifestyle" factors (e.g., diet, smoking, physical activity) that primarily affect the health of one individual, vaccination status has the potential to affect large groups of people (e.g., a workplace) during a global pandemic.

Stay tuned. We are 18 months into the pandemic with many more health and financial impacts likely to come. With many diverse and conflicting viewpoints about vaccination and ever-evolving research findings and government guidelines, it is likely to be a "bumpy ride." Stay safe and be well.