Protecting Medicaid is Vital for 100,000 Essential Workers in Maryland

More than 100,000 essential workers in Maryland rely on Medicaid for health insurance coverage, according to a recent analysis by the Center on Budget and Policy Priorities, but neither federal nor state policymakers have done enough to protect these workers’ access to health care right when they need it most. If the state responds to huge revenue shortfalls by cutting back on Medicaid funding, it would endanger Marylanders who work as home health aides, grocery store workers, food production workers, or in other jobs that put them on the front lines of the pandemic. Congress must promptly pass a pandemic relief bill that strengthens federal Medicaid funding and shores up state and local budgets. Here in Maryland, state policymakers should look to reserve funds and raising revenue to close budget holes, rather than slash vital services.

Thousands of workers risk their health every day to keep Maryland families fed, care for aging adults, maintain sanitary public spaces, and do other jobs that keep our communities going. People of all racial and ethnic backgrounds are represented among essential workers, and workers of color are more likely to be in an essential job than their white counterparts. One-third of white workers in Maryland are in a job that’s considered essential, as are two-fifths of Black workers and nearly half of Latinx workers.

Despite their vital role supporting Maryland communities, essential workers often take home lower wages than workers in other jobs:

• Typical essential workers in Maryland take home about $38,000 per year, compared to $42,300 among typical Maryland workers overall.
• Overall, typical men working Maryland take home about $49,200 per year; among women who work in essential jobs, typical pay is only $33,900 per year.
• Overall, white workers in Maryland take home about $50,000 per year; Black workers in essential jobs typically take home $34,800, and Latinx workers in essential jobs typically take home only $27,200 per year.

One in eight essential workers in Maryland – 107,000 workers in total – are insured through Medicaid, a higher share than other workers in Maryland or essential workers in most other states. Among essential workers with low family incomes, three out of eight are insured through Medicaid. This insurance coverage is more important now than ever, for the workers who face daily health risks as well as for public health, as adequate health care is one of the best way to prevent the spread of infectious disease.

But these workers could lose their health coverage or see it weakened at the worst possible time if policymakers cut health funding to fill the budget hole caused by the pandemic (up to $2.6 billion in revenue losses this budget year, according to state analysts). As the state’s second-largest budget item after public schools, Medicaid almost always lands on the chopping block when policymakers choose to cut.

During the Great Recession and other fiscal squeezes, policymakers have taken harmful steps such as:

• Cutting payment rates for physicians, home health providers, dentists, and managed care organizations, which reduces providers’ incentive to accept Medicaid payment
• Imposing rigid limits on coverage for inpatient hospital care, creating administrative obstacles to access certain prescription medications including medications used to treat serious psychiatric conditions, and raising out-of-pocket costs for patients with low incomes
• Taking health coverage away from immigrants regardless of legal status, even during pregnancy – a step courts later ruled violated the Maryland Constitution

Cuts like these would worsen barriers many Marylanders already face to accessing needed care. Nearly three out of five Maryland workers who rely on Medicaid are women, compared to just under half of the state’s workforce. Just under 40 percent of Maryland workers insured through Medicaid are white (compared to 58 percent of Maryland workers overall), 40 percent are Black (compared to 24 percent overall), and 11 percent are Latinx (compared to 9 percent overall).

Congress is in the best position to protect essential workers’ health care. Federal lawmakers should act quickly to increase the federal share of Medicaid costs, as they did in the 2009 stimulus bill. They should also provide significant general fiscal aid to state and local governments, which would ease budget strains in Maryland and elsewhere and reduce pressure to cut essential services. Lawmakers’ decision to go into recess without passing another COVID-19 relief bill – driven largely by Senate Republicans’ refusal to negotiate on urgent priorities like state and local aid – has needlessly endangered millions of Americans.

State policymakers also have an important role to play. If Gov. Hogan and the General Assembly respond to revenue losses by cutting essential services – which would almost certainly include Medicaid – it would threaten public health as well as the state’s economy. Past projections by state legislative analysts suggest that each $1 reduction in state expenditures may reduce Marylanders’ take-home income by about $1.15. This means that allocating a proportionate share of state analysts’ best-case revenue loss projection to Medicaid would take about $460 million out of Marylanders’ pockets (about $76 per person). A more economically sound approach would be to close corporate tax loopholes and ask the wealthiest individuals to pay their fair share. Research shows that protecting families who live paycheck to paycheck is the best way to shore up sales at local businesses and support our economy.