Preparing for Coronavirus: Who's Paying for All This?

Summary

WSJ Your Money Briefing

Episode: Preparing for Coronavirus: Who's Paying for All This?

Date: March 5, 2020
Host: J.R. Whalen (Wall Street Journal)
Guest: Julia Carpenter (Personal Finance Reporter, Wall Street Journal)

---

Episode Overview

This episode addresses the financial implications of the early 2020 coronavirus outbreak for Americans. Host J.R. Whalen and WSJ personal finance reporter Julia Carpenter break down who bears the costs—from testing and protective supplies to lost work and travel cancellations—as well as how emergency measures like the Federal Reserve’s emergency rate cut could affect consumer finances. The conversation focuses on the real-world costs individuals face and the policies (or lack thereof) that mitigate—or fail to mitigate—those burdens.

---

Key Discussion Points & Insights

1. The Costs of Testing for Coronavirus

• Public vs. Private Testing Costs
  • Testing at public health laboratories is free, provided by the CDC.
  • Testing elsewhere may or may not be covered by insurance; costs will vary.
    • Quote: “Testing is going to be free in public health laboratories... But if you're getting tested somewhere that's outside of that scope, then you'll have to see if it's covered by your insurance.” — Julia Carpenter [01:52]
• State-Level Decisions
  • Some states, like New York, have required insurers to waive out-of-pocket costs for testing.
    • Quote: “New York announced earlier this week that health insurers will have to waive out of pocket costs related to testing.” — Julia Carpenter [02:11]
• Insurance Network Issues
  • The situation for uninsured people or those using out-of-network hospitals is uncertain.
    • Quote: “We still don't know what's going to happen for people who are uninsured or for people who are in out of network hospitals.” — Julia Carpenter [02:25]

2. Out-of-Pocket Expenses: Protective Supplies

• Personal Responsibility for Supplies
  • Items like hand sanitizer and masks are in demand, but insurance generally won’t reimburse these costs; they’re "personal expenses."
  • Flexible spending accounts (FSAs) or health savings accounts (HSAs) may cover some items.
    • Quote: “You likely reach out to your flexible spending account or your health savings account and include these. It's not something that insurers are encouraging people to do… They're telling them to think of them as personal expenses.” — Julia Carpenter [00:51, 02:46]

3. Travel Disruptions and Reimbursements

• Cancellations: Who Pays?
  • If the airline cancels, you’re eligible for reimbursement.
  • If you cancel, it depends on your travel insurance policy’s terms.
    • Quote: "If the airline cancels your flight, you're eligible to be reimbursed. If you decide to cancel your flight, that's really determined... by the terms of your travel insurance policy." — Julia Carpenter [03:15]

4. Work Disruptions & Sick Leave

• Financial Impact of Quarantines & Sick Days
  • Hourly workers/people without paid sick leave lose income if quarantined or ill.
  • Some may incur childcare costs as well.
    • Quote: "If you are an hourly worker or somebody without sick leave... that's a personal cost to you. Some people have to arrange childcare depending on where they're quarantined or how sick they are." — Julia Carpenter [03:49]
• Lack of Universal Paid Sick Leave
  • The U.S. lacks federal guarantees; coverage depends on workplace policies.
    • Quote: "So while many countries provide or guarantee sick leave... America is not one of those countries. So depending on the policy in place at your workplace...experts are encouraging people to examine [their policies]." — Julia Carpenter [03:49]
• Employer Policy Changes
  • Many workplaces are updating sick leave and remote work policies.
  • Remote work isn’t possible for all jobs, particularly in service industries.
    • Quote: "She has been encouraging workplaces to revise their work from home... policies... But there are some jobs where remote work just isn't possible." — Julia Carpenter [04:37]

5. Market Turbulence & The Fed’s Rate Cut

• Rate Cuts Trigger Refinance Opportunities
  • With the Fed’s emergency cut and lower 10-year Treasury yields, consumers may benefit from refinancing mortgages.
    • Quote: "When we see the Yield on the US 10 year drop, we see a lot more interest in refinancing... It depends on how long you're going to stay in your house...the rate you already have... requires just doing some math." — Julia Carpenter [05:20]

---

Memorable Moments & Notable Quotes

• On Sick Leave Gap:
  “America is not one of those countries [with guaranteed sick leave]...experts are encouraging people to examine to see whether or not them being sick results in them losing pay or if that's something that their workplace allows them to do...” — Julia Carpenter [03:49]

• On Personal Preparedness Costs:
  “Hand sanitizer, face masks, these are protective pieces that people are running to purchase... they're telling them to think of them as personal expenses.” — Julia Carpenter [00:51]

• On Uncertainty for Uninsured and Out-of-Network:
  "We still don't know what's going to happen for people who are uninsured or... seeing out-of-network providers." — Julia Carpenter [02:25]

• On Remote Work Challenges:
  “There are some jobs where remote work just isn't possible. If you're a service worker or if you work in an industry that doesn't have that option, then it gets much trickier.” — Julia Carpenter [04:37]

---

Important Timestamps

• 00:35 – Episode introduction & overview of coronavirus-related expenses.
• 01:47 – Discussion on cost and coverage of coronavirus testing.
• 02:40 – Are cleaning supplies and masks reimbursable?
• 03:07 – Travel disruptions: cancellations and insurance.
• 03:33 – The cost of self-quarantine and sick leave shortcomings.
• 04:30 – How workplaces and employees are adapting with policy revisions and remote work.
• 05:03 – Financial market reactions and how consumers can benefit from lower rates by refinancing.

---

Conclusion

The episode illuminates the patchwork and sometimes inadequate systems supporting Americans during the outbreak, with diverse expenses falling on individuals depending on where and how they seek care, work, and travel. Listeners are encouraged to scrutinize their insurance, workplace policies, and finances as the situation unfolds—and to weigh the math if considering mortgage refinancing amid lower interest rates.

Transcript

[Deel Advertiser]

Still running global payroll like a relay race. Deal replaces fragmented payroll vendors with one global system. No third parties hire, manage and pay teams in 150 plus countries with in house local experts and white glove delivery and deal plugs into what you already use. Workday SAP Netsuite operate like a local everywhere. Visit d e l.com WSJ that's d e e l.com WSJ.

[J.R. Whalen]

Here's your Money briefing. I'm J.R. whalen at the Wall Street Journal in New York. The spread of the coronavirus in the US has sent people racing to be tested, forced them to work from home and stock up on cleaning supplies. It raises the question who's paying for all this?

[Julia Carpenter]

A lot of people have been talking about how things like hand sanitizer, face masks, these are protective pieces that people are running to purchase. Now you likely reach out to your flexible spending account or your health savings account and include these. It's not something that insurers are encouraging people to do. For the time being. They're telling them to think of them as personal expenses.

[J.R. Whalen]

That's Wall Street Journal personal finance reporter Julia Carpenter coming up. She'll talk about the personal finance impact of the coronavirus and explain how consumers might benefit from the Fed lowering interest rates. That's. Between testing for coronavirus, buying hand sanitizer and stocking up on supplies in the event of self quarantine. Being prepared can be expensive. But do consumers have to foot the bill? Let's bring in Wall Street Journal personal finance reporter Julia Carpenter for some answers.

So Julia, a big question I'm sure people have is what does it cost to get tested?

[Julia Carpenter]

What we know right now is that testing is going to be free in public health laboratories that's provided by the cd. But if you're getting tested somewhere that's outside of that scope, then you'll have to see if it's covered by your insurance.

[J.R. Whalen]

And in some cases states have stepped forward and said to the insurance companies you can't charge consumers out of pocket costs.

[Julia Carpenter]

New York is one of those states. New York announced earlier this week that health insurers will have to waive out of pocket costs related to testing.

[J.R. Whalen]

And this can be where in network versus out of network hospital selection can be important.

[Julia Carpenter]

We still don't know what's going to happen for people who are uninsured or for people who are in out of network hospitals or in out of network seeing out of network providers. We do know that for people in network they're probably going to be viewing this just like they would any other kind of care.

[J.R. Whalen]

People are also spending a lot of money on retail products for protection. Is any of that reimbursable?

[Julia Carpenter]

So a lot of people have been talking about how things like hand sanitizer, face masks, these are protective pieces that people are running to purchase. Now likely reach out to your flexible spending account or your health savings account and include these. It's not something that insurers are encouraging people to do for the time being. They're telling them to think of them as personal expenses.

[J.R. Whalen]

And the fears over the virus are really disrupting people's travel schedules. I would imagine. A lot of cancellations, a ton of cancellations.

[Julia Carpenter]

People both people canceling their own travel and airlines canceling planned travel. And the difference between that is that if the airline cancels your flight, you're eligible to be reimbursed. If you decide to cancel your flight, that's really determined. Or how you will be reimbursed is determined by the terms of your travel insurance policy.

[J.R. Whalen]

Well, United Airlines for one says it's going to cut back on domestic and international flights in April because of reduced demand. You know, we're also seeing thousands of people being forced to self quarantine at home and that can result in a lot of missed work. Who's paying for that?

[Julia Carpenter]

Yeah, there's definitely a personal cost. You know, if you are an hourly worker or somebody without sick leave that you're missing work, that's a personal cost to you. Some people have to arrange childcare depending on where they're quarantined or how sick they are. But there's also a problem in terms of how rare paid sick leave actually is. So while many countries provide or guarantee sick leave for their workers, America is not one of those countries. So depending on the policy in place at your workplace, that's something that experts are encouraging people to examine to see whether or not them being sick results in them losing pay or if that's something that their workplace allows them to do in order to keep the workplace safe as well.

[J.R. Whalen]

And some workplaces are redrawing up their rules regarding sick leave to manage this concern over the virus.

[Julia Carpenter]

Yeah, and I mean related to self quarantine too. I was speaking with somebody yesterday who said that she has been encouraging workplaces to revise their work from home or their remote work policies to encourage people to take advantage of that if they're not feeling well or if they're worried about contaminating the workplace or being in a contaminated workplace. But there are some jobs where remote work just isn't possible. If you're a service worker or if you work in an industry that doesn't have that option, then it gets much trickier.

[J.R. Whalen]

You know, Julia, these preparations for the virus have moved us into a new realm of personal finance. The markets are, you know, gyrating up and down. The Federal Reserve this week with its emergency rate reduction and the rate on the 10 year treasury notes hits a record low. How can consumers benefit from this?

[Julia Carpenter]

So when we see the Yield on the US 10 year drop, we see a lot more interest in refinancing because people are expecting mortgage rates to go down and they're wondering how much money they could potentially save in refinancing. What I was learning in the course of reporting that this is that it's really up to the particular individual. So it depends on how long you're going to stay in your house. It depends on the rate you already have on your current mortgage. It requires just doing some math, seeing when that makes sense how much the monthly payments and the change in the monthly payments will actually affect you.

[J.R. Whalen]

All right.

That's Wall Street Journal personal finance reporter Julia Carpenter. Julia, thanks for coming on the show.

[Julia Carpenter]

Thanks for having me.

[J.R. Whalen]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[Deel Advertiser]

Deal replaces fragmented payroll vendors with one global system. No third parties hire, manage and pay teams in 150 plus countries. Operate like a local everywhere. Visit deel.com WSJ.