Marketplace - What happens when we lose healthcare coverage

Episode Date: June 2, 2026

Massive Medicaid cuts, including new work requirements, are rolling out across the country. Trouble filing paperwork will be one reason qualifying Americans lose their coverage. In this episode, what history tells us about cutting Medicaid funding. Plus: Personal incomes are falling, consumers are prioritizing value over luxury, and we explain incoming Fed Chair Kevin Warsh’s preferred inflation measure.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

On the program today, what really is in a word? From American public media. This is Marketplace. In Los Angeles, I'm Kyle Ristall. It is Tuesday. Today, this one is the second of June. Good as it always is, to have you along, everybody. What I'm about to say is perhaps self-evident, but bear with me here for a second, would you?

Words have meaning. I know, basic. but important. Our words of choice today are wages and income. As we were saying yesterday, we're getting an update on worker wages on Friday when the May unemployment report lands. But as Marketblazes Justin Ho reports today to get us going, economists and analysts are keeping an eye on incomes, too. Every month, the Bureau of Economic Analysis offers up a few different ways to measure people's income. There's total personal income. There's income after 10, taxes, but neither of those gives us a clear picture of what's going on with the labor market,

because they include payments from the government that are not wages. So the BEA offers another measure of income. Personal income excluding transfers like social security payments and so forth. That's Menzsche Chen, an economics professor at the University of Wisconsin-Madison. If you're trying to get at the sort of underlying state of the private sector, personal income excluding the current transfers is more useful. Right now, that number is telling us that income has been falling. It peaked back in September. Shannon Grine is an economist with Wells Fargo.

She says one thing that's dragging it down is inflation. Higher prices are eroding a lot of the purchasing power of households, which is obviously a challenge. Grine says wage growth is slowing too because demand for labor is weak. No matter how you want to characterize that the labor market has moderated over the past number of years, right? We're basically at stall speed in terms of hiring. The latest openings data suggested a little bit of a pickup, but openings remain lower than they've been. This decline in income could drag the rest of the economy down with it. Kate Bond, Chief Economist with the Institute for Women's Policy Research, says that's because personal income is a leading indicator.

And when we have declining personal income, that is going to mean that particularly people with less wealth are going to have to either reduce their spending or have more debt to maintain. their family consumption. And that's going to ripple outward. In a consumer-driven economy, when people have less disposable income, they're spending less. And so there's less economic activity generated, broadly speaking. The economists at the National Bureau of Economic Research keep a close watch on personal income excluding transfers, because it can be one indicator of when a recession is starting. I'm Justin Ho for Marketplace. Wall Street today traders sent the three major indices to fresh record highs, but they did it without a whole lot of enthusiasm. We will have the details enthusiastically when we do the numbers.

Wall Street has put first quarter earnings season in the rearview mirror, and although, as you know, the stock market is not the economy, one must note here that according to the financial data company fact set, the year-over-year earnings growth rate for the S&P 500 was just shy of 29%. So, corporate America, doing okay. consumer America. Here's Marketplace's Kristen Schwab. A single company's earnings call isn't going to tell you what's going on with consumers, but listen to a lot of them, and you can learn something about how Americans are shopping.

Consumers have many levers when it comes to adjusting their purchases. Ravi Dar directs the Yale Center for Customer Insights. He says people are looking at their choices and making tradeoffs. For example, they can change the quantity. You know, I go out to eat, but I eat less of it. They can also change the quality. I decide not to go to Shack, I go to McDonald's. Shake Shack has cut its earnings forecast for the year.

McDonald's has surpassed expectations. That's a trend across the economy. Consumers are focused on finding value. But it doesn't necessarily mean they're spending less, says Chris Carrill, lead restaurants analyst at Key Bank Capital Markets. It does make it harder to determine. and whether or not, you know, the macro is actually weighing on restaurant purchases. Consumers are making similar shifts when it comes to retail.

David Swartz, a consumer equity analyst at Morningstar, says people are abandoning super luxury brands for coach bags. Instead of the department store, they're going to T.J. Max. And they're trying to not give into temptation. People will tend to visit stores probably less often and probably buy more when they're there. Again, a change in spending habits, but not necessarily a change in spending. Swartz says Americans are on edge between high gas prices, low consumer sentiment, a war. Nothing is stable at the moment. But the bottom line is that consumer spending is better than what you might expect and better than what a lot of these companies expected.

So why are consumers acting cautious, but still spending? It's like people are waiting for the other shoe to drop. Ravi Dar at Yale says that shoe is income, be it a stock market crash or a housing market crash or most consequential, a job market crash. Do I have a job? I'm making enough money today, which allows me to spend on the different things that I like to spend on. Ravi says consumers are likely to keep spending pretty steadily until they can't. I'm Kristen Schwab for Marketplace. Famously, around here at least, the Federal Reserve has a favorite. measure of inflation. PCE, the personal consumption expenditures price index, which, as we learned

last week, sits at 3.8%. 3.3% if you want to talk the core measure, but either way, well above the Fed's 2% target. At his confirmation hearing in April, though, new chair Kevin Warsh had some thoughts about that. The measures I prefer are looking at things that are called trimmed averages. trimmed averages also called trimmed means. What the trimmed mean inflation measure is trying to do is it's trying to exclude price jumps. Tiffany Wilding, she's a managing director and economist at Pimco right there. Price jump, she says, like... When you and I are paying for our streaming, you know, our Disney Plus, it's not like we're getting incremental price increases every single month.

They have these kind of bigger adjustments, you know, maybe once a year or once every several years. That core PCE I mentioned, and as you could probably repeat back to me, right, takes out food and energy because they are so volatile. They consistently muddy the inflation waters. The trimmed mean is all about kicking out other temporary outliers. It's sort of trying to understand, you know, what are inflationary pressures maybe that are more ingrained, you know, that would tell us more about the underlying state of the economy? The Federal Reserve Bank of Dallas puts out probably the best known trimmed mean reading, which for, April came in at 2.3%, a much more comfortable number for the Federal Reserve, as you might imagine. What counts, though, as an outlier can be in the eye of the beholder.

The way the Dallas Fed trims PC measure is it essentially trims 24% off of the top and 31% off off of the bottom. That's more than half of the measure. Vigas Patel, they're an analyst at Employ America. And it's asymmetric, which means you're throwing out. not more of the inflationary measures rather than the ones that are bringing inflation down. How you trim matters substantially. If you look historically, it's actually the historical bias of that measure is to be above core inflation. So just because the trimmed mean is under core today doesn't mean, you know, in six months' time

or even a year's time that it'll still be there. Think about what we've heard from now former Chair Powell for years and years, more data So just, you know, give it some time. History, Mark Twain, told us, might not repeat itself, but it sure does rhyme. Health care is the topic du jour. Medicaid in particular, some of the big cuts to which that were part of the GOP's tax and spending law last summer, they are starting to phase in right around now. Nebraska has just become the first state to implement work requirements for low-income people

who get government subsidized health insurance. Montana's next in July, and by next year, everybody on Medicaid, who's not a child or elderly is going to have to prove they're either working in school or volunteering or that they qualify for an exemption. The thing is, and yes, finally getting back to Mr. Twain here, this isn't the first time that Medicaid has had work requirements. And a study last month in the Millbank quarterly, that's a health policy journal, about how cuts have played out in the past, does offer some clues about what might lie ahead. Marketplace's Samantha Fields. Has more on that one. Working in health policy right now sort of feels to Camille Rishu like being the scientist at the beginning of the Godzilla movie.

Where you're like running in and you're like, Godzilla's about to destroy the city. And no one is hating your warning. Rishu, who works at the nonprofit Arkansas advocates for children and families, says it feels that way because of the looming cuts to Medicaid. We know what happens when people don't have health coverage. You have more uncompensated care, more medical debt, more providers not able to stay open because they're losing patients. She saw all of that in Arkansas in 2018 when the state passed Medicaid work requirements. In the first six months, 18,000 people lost coverage, the overwhelming majority of them for paperwork reasons. Those work requirements were eventually overturned by a court, but now new ones are coming back.

and not just in Arkansas around the country. Larry Leavitt at the Health Policy Nonprofit KFF says over the next few years, all sorts of new rules are set to phase in that will reduce how much the federal government spends on Medicaid by nearly a trillion dollars. These include restrictions on how much states can tax hospitals and other health care providers to help finance their Medicaid programs, restrictions and eligibility for lawfully present immigrants. And the new work requirements. All of this is likely to cause about seven and a half million people to lose their insurance, according to estimates from the Congressional Budget Office. This is the biggest rollback in federal support for health care ever. And Dr. Adam Gaffney at Harvard Medical School says on top of that, Congress also put new restrictions on Affordable Care Act coverage and let those enhanced subsidies expire.

My big worry is that we see the intersection of Medicaid costs. and the ACA cuts resulting in a surge in on insurance, a rising number of Americans who are not going to the doctor, growing numbers who are not taking the medications they need or avoiding the emergency room because they don't want to get hit with medical bills and that this will worsen Americans' health. There's evidence that this is what will happen from research Gaffney just did with a few colleagues, looking at what happened after several other Medicaid cuts in the past.

The earliest was in early 1980s when Ronald Reagan, signed the budget law that dramatically reduced Medicaid funding. At the time, unemployment was rising, and the U.S. had just tipped into recession, which is typically when safety net programs like Medicaid catch people. But in the 80s, that didn't really happen. So the uninsurance rate went up, the poverty rate went up. And people who previously would have been eligible for Medicaid weren't because of the cuts. In another instance, years later...

In Tennessee, in 2005, The state government passed really large Medicaid cuts because it was facing budgetary pressure. And he says much like what happened in Arkansas in 2018, Tennessee's cuts led to a lot of people losing their health insurance. People got less care. People didn't see the doctor. People didn't get mammograms. People actually were more likely to be evicted. And a couple of studies indicate they were also more likely to die. Camille Rishu in Arkansas says this all leads her to believe one thing. This is a bad policy that they're implementing. Past experience shows most people who lose their coverage because of Medicaid work requirements are actually eligible.

They just struggle with the paperwork and red tape. There are some ways that you can kind of mitigate harm. We're urging states like ours to make the burden as little as possible. Don't make it more complicated than it needs to be. She says that could look like having good systems in place, doing aggressive outreach so people know what they have to do to keep their insurance, and making it easy for people with health issues to qualify for an exemption. I'm Samantha Fields for Marketplace. Coming up.

I smelled it just now. It smells like sulfur, rotten eggs. Used to smell like money. Now it smells like that. First, though, let's do the numbers. So here we are, enthusiastically. Down industrial is up 228 points today, about a half percent, 51,307. Back up seven points. We'll call that flat percentage-wise. 27,093. The SP 500 up nine points.

About a 10th percent, 76 and nine there. Kristen Schwab was telling us about what first quarter earnings reports have to stay about the state of consumer America. Here are some companies she mentioned. McDonald's expanded eight tenth percent tapestry, which owns the coach brand. Unwound one-tenth one percent, TjX. Parent company at T.J. Max and others increased about six tenths percent. Dollar General, we were talking about them yesterday, reported first quarter. earnings today that beat analyst estimates. However, comma, the company's CEO said their core customer was constrained by SNAP benefit reductions and higher gas prices. Dollar General dropped three and three-tenths percent on the day. The White House says it's lowering tariffs on imported pharma quinine and some industrial machinery. New rate would drop to 15 percent down from 25. Deer and company, up six and eight-tenths

percent today. Carrier, they make air conditioning equipment, heated up two percent. Bond prices, What did they do? Well, thanks for asking. They fell. Yield on the tenure, T-note up 4.45%. You're listening to Marketplace. This is Marketplace. I'm Kai Risdahl.

The following story is brought to you in part by inflation in the Eurozone, which for a flash reading came in this morning. The European Union says at 3.2% for May. That's an only slightly roundabout way of saying that we are headed into central bank interest rate setting season, which I bet you didn't know was a thing, did you? The biggies on the calendar. are in this order, Canada, the European Central Bank, the Bank of Japan, oh look, the Federal Reserve, and then the Bank of England to wrap things up. All of them meeting and voting on rates in the

next two weeks or so. And while the job of being a central banker is never easy, the past couple of three months in particular have been especially trying further explanation one assumes not required other than to say that rate-cutting environment they'd all been planning on, say goodbye to that. Marketplace's Mitchell Hartman has our story. With inflation in Europe surging higher, the ECB is returning to the playbook it's successfully used to fight inflation after COVID, says Daniela Hathorne at Capital.com. The ECB has done a pretty good job to the point where they managed to get inflation down to 2%, which is that wholly threshold that most central bank has wanted to keep. That means the ECB has some wiggle room. To be able to hike rates now, just to make sure that they're staying ahead of.

of the curve. The Europeans aren't the only ones eyeing higher rates, says Jennifer Lee at BMO capital markets. The Bank of Japan, who would have thought inflation is finally picking up after like how many decades. Then the bank of Japan has been raising rates. Futures markets predict the U.S. Federal Reserve will hold rates steady at its meeting this month and in July, September and October, not hiking rates until December at the earliest, which could prove risky, says former Fed economist Claudia Somm. The year-over-year inflation is. kind of getting close to 4%. That's like twice the Fed's target.

The challenge is to predict how long this rapid acceleration and prices will last. And that's an important question for the Fed because if we think it's going to be persistent, then they probably should be raising rates and trying to slow that inflation down. Like other central banks seem ready to do right now. This disconnect between the Fed and its major economy counterparts is relatively new, says Jennifer Lee. I remember back in the day when, you know, it was always the Fed leading the way The Fed raised rates, everyone raised rates.

So the Fed cut, everyone was cutting. Now, she says it's each central bank for itself. They have to do what is right for their economies, for their inflation rates. And I think this trade war sort of set everyone off in a different direction. I asked her, do you think the new Fed chair, Kevin Warsh, will be influenced by other central bank's rate decisions? I don't know if he's going to care. I mean, given all the commentary that we've heard from him, I don't think he does. One voice he probably does care about, the presidents, says Daniela Hathorn.

He was appointed by Trump. We know that Trump has been calling for lower rates for a while. Of course, you can't ignore the data. She warns if Warsh does, holding out for rate cuts in the face of resurgent inflation, it'll undermine the Fed's credibility globally. I'm Mitchell Hartman for Marketplace. The easy way to set up this next piece is to mention that crude oil today sits right in the mid-90 a barrel or so, up a percent or so for each of the commonly quoted benchmarks.

But that doesn't really do justice to the subject at hand, which is the lasting legacy of oil production. In this case, in the great state of West Virginia, starting back in the mid-1800, speculators drilled more than 100,000 wells there. Most of them, as it happens, stopped actually producing oil decades ago. And by law, that means the companies that own those wells have to plug them. Let's just say that law has been honored in the breach. Today, West Virginia has one inspector for every 6,700 wells. And to boot, most of the 100,000 or so wells that do need to be plugged haven't even been recorded. From the mountains of West Virginia, marketplace of Kelly Wells explained.

On a suburban side road about 15 minutes from the center of Charleston, West Virginia, there's a quiet hissing sound, almost completely masked by traffic noise coming from I-64. The culprit is hard to find. But David McMahon has heard old oil wells make this sound before. The sound of the gas escaping. He's a lawyer and co-founder of the West Virginia Surface Owners Rights Organization. He wades through a mess of wild grape vines and Virginia creeper. I forgot my machete, Ted Bettner, along with Ted Bettner, a senior researcher at the Ohio River Valley Institute. He just wrote a report on orphaned oil wells like the one they're looking for.

I smelled it just now. It smells like sulfur, rotten eggs. They pull back vines. to reveal an old, unassuming, four-foot-tall metal structure. It looks like a scuba tank topped with some metal connector pieces. Turns out, it is an oil well from 1939. It likely stopped being useful decades ago. It's orphaned because the company in charge of it is long gone.

So now it's the state's problem. When wells like this one sit unplugged, hissing and smelling, lawyer David McMahon says they cause a whole, host of problems. Methane leaks out of them into the atmosphere. Methane, as in the potent planet warming gas, major player in climate change. But also oil and water can leak out of them onto a farmer's land. Poisoning soil and water, harming crops and livestock. They can have problems with the coal seam that they penetrated. Because if a coal miner runs into an oil well, it can explode or leak and poison the people working down there. The methane can go down into people's grattan water. I've

seeing people like their faucet and their sinks. And flammable drinking water is bad. The reason the state hasn't plugged this well, it's really expensive. You're looking at anywhere from 100 to 125,000 on average. Ted Bettner, with the Ohio River Valley Institute, estimates in his report that statewide there's about $5 billion of plugging to do. The older the well is, the harder it is to fish everything. out and clean it out and get to the bottom.

Most wells in the state are undocumented, but the number the state knows about has been going up, according to Bettner's report. And that's actually good, according to Sarah Armitage, a Boston University professor who's researched the oil drilling industry. The availability of federal funding to assist states with this cleanup process has increased the incentive for states to undertake this costly effort to go out and document their orphan wells. Because step one to solving the orphaned well problem is figuring out how big the problem is. Step two is getting the money to plug the wells.

And so if the well becomes orphaned, the funds available to the state to cover plugging costs are only a fraction of the actual costs incurred. David McMahon, the lawyer, has been trying to get a bill passed in West Virginia that will help fix that. I'd say there is some hope, but getting anything through the legislature that portions of the oil and gas industry oppose. It's not going to be easy. Lawmakers introduced the bill in February. It would force drillers of new wells to set aside money in a bank account that will cover the cost of plugging them later. In Dunbar, West Virginia, I'm Kaylee Wells for Marketplace. This final note on the way out today in which are packages may be showing up 4% later.

Saw this tidbit in the Wall Street Journal. Data from InRicks, that's a transportation analytics company, that shows commercial truck drivers were driving on average 4% slower in late April than they were at the beginning of the year. That is surveying 60 million commercial truck trips across 10 major metro areas. Why, I hear you ask, diesel right now up 44% from before the war. Jordan Manj, Zonil Maharaj, Janet Wynn, Olga Oxman, and Virginia K. Smith are the digital team. I'm Kai Rizzdal. We will see you tomorrow, everybody. This is APM. Amy Scott, and this week on our podcast, How We Survive, I travel to an undisclosed location in the San Francisco Bay Area to learn about a controversial solution to the climate crisis. It's called solar geoengineering, and it's basically a way to dim the sun in order to cool the planet. Proponents view this as a necessary intervention. Others are not convinced.

If we do this, this is a decision that will affect all life on the planet. I don't think it should be up to a couple guys in California. And while so far solar geoengineering is happening at a small scale, what happens if a rogue nation, or a rogue billionaire, makes the decision for us? I don't see that we have a world government that is capable of making a decision on behalf of everybody who lives on the planet. Listen to this week's episode of How We Survive on your favorite podcast app.