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Michael Dunne: I'm Michael Dunne. Medicaid was developed back in the 1960s as a safety net for low-income people who couldn't afford health insurance. Its design was a kind of option of last resort, so that people on the lowest rungs of the income ladder could afford to get sick. It was never intended to be an option of first resort, but as you'll learn today, many of Oregon's richest companies are in a way forcing many of their employees into Medicaid because they found a way to not have to offer employer-paid health insurance. From Amazon to huge grocery store chains, thousands upon thousands of employees in Oregon are barely getting by with Medicaid, while their employers are raking in huge profits.
Today on the show, you'll hear from an Oregon Capital Chronicle reporter about this vast discrepancy in our state. Today's show is not about construction, but we are in a way going to be talking about ceilings and floors. The ceiling is the one that has been busted through with record profits from Oregon's largest companies. The floor is the option of last resort that many employees of these record-setting companies have to settle for in the form of public health insurance.
Indeed, these companies handsomely reward their executives and shareholders, but in an effort to save money, leave their employees scrambling for health insurance by opting into Medicaid. It's a story of the have-mores and have-a-lot-less, and a reporter we often speak to at the Oregon Capital Chronicle brings it to us next. I want to note that we reached out to the companies and trade groups representing these companies for comment, but never heard back.
Oregon Capital Chronicle's senior reporter Alex Baumhardt. Alex, it's always great to talk to you. Thanks so much for coming on and chatting with us.
Alex Baumhardt: Thanks for having me.
Dunne: Your recent story was titled "In Oregon: Big Grocery, Retail Companies Have Highest Number of Employees on Medicaid." Just generally, what did you find out?
Baumhardt: Your big-box stores, your large retailers, Walmart, Amazon, the big grocers like Safeway and Fred Meyer, have the highest number of employees listing them on their Medicaid forms. The net result is that those companies, all of which are multibillion-dollar companies, including Amazon, the most profitable retailer in the world, are relying quite heavily on the public health insurance system and Medicaid. I just think it's fascinating that legislation at the federal level in just the last year has massively cut Medicaid spending, in large part by making it harder to get, and these corporations, which have benefited enormously from Trump-era tax cuts since 2017, now have an effective tax rate that's below the effective tax rate many of us pay.
Dunne: Talk a little bit about some of the differences between full-time employees and part-time employees, because as I understand it, even some full-time employees are having to rely on this public option.
Baumhardt: If you work less than 30 hours at Amazon, and you work less than 30 hours at another job, you are, by all intents and purposes, working full time. You still might not be making wages high enough to buy insurance through the Affordable Care Act marketplace. So you could work full time in that sense and still qualify for Medicaid, but your employer wouldn't be liable to give you that insurance because you're working less than 30 hours at any one job. We've sort of created a system, state by state and federally, where we've decided you must work in order to receive basic health care coverage. On the other hand, many people can work full time and still not get it.
Dunne: Wow. What was the ranking of which companies had the most employees on Medicaid? Do you have a ranking of the top five or seven, something like that?
Baumhardt: Yes. Walmart was at the top of the list. Safeway and its parent company, Albertsons, was second. Amazon and its affiliates, including Whole Foods and some of the third-party delivery groups that are technically Amazon employees, was third. Fred Meyer and its parent company, Kroger, was fourth, and McDonald's was fifth. I have to tell you, Michael, this was a huge spreadsheet. I had requested from the Oregon Health Authority the 500 most frequently listed companies, but people list these themselves. Some will write Walmart as two words, or Walmart with a dash, so that kind of thing is easy to clean up in a spreadsheet. I also want to assure listeners this wasn't done with ChatGPT. I am a staunch Excel spreadsheet girl.
Dunne: Okay!
Dunne: Is this, as best you can suss out, the strategy? It's, we make a lot of money through a lot of tax breaks we got from the "big, beautiful bill," and we can save even more money by having our employees get health insurance not through us, but through the public option. Is this kind of baked into their business model?
Baumhardt: Oh, absolutely. The revenue these executives take in, that their shareholders take in, would be significantly less if these companies were taxed at a historic rate. We are at historic lows for what these companies are paying into the federal tax system. It would absolutely cut back on their earnings, their profits. So there's just no way around it. We have, in the United States, in a way that I think much of the economically prosperous world finds deeply depraved, decided that your access to health care is contingent on your ability to work. And if you're not working enough, even though 30 hours is still part time, that's still a lot of your waking life, we've decided you don't qualify for this. We've decided to leave it up to employers to decide a lot of these things, and it's much cheaper for an Amazon or a Walmart to rely on the tax base of the entire country than to cough up more of their own money. So there's really no way to cut it. These companies would report lower earnings if they had to pay higher taxes into systems like Medicaid, into SNAP.
I should add all of these companies, Walmart, Safeway, Albertsons, Amazon, Fred Meyer and Kroger, are also in the top five of Oregon's SNAP income verification forms most listed. So these companies are not only relying very heavily on public health care for their employees, who, by the way, they depend on to show up day in and day out healthy, but also for their food. These employees are relying on public subsidies to afford their groceries, many of them from the same huge grocery retailers they work for.
Dunne: And as we've seen, prices keep going up at the grocery store, so that's almost a double whammy for these employees.
Baumhardt: Oh yeah, totally. There's no way to cut it. They are the beneficiaries of a public system that subsidizes their profits.
Dunne: So I imagine you reached out to either the retailers' associations or the companies themselves. What kind of comments did you get back from these companies or their representatives?
Baumhardt: Yeah, I mean, they really don't see themselves as a problem. I think it's a common refrain we hear often from large corporations that are getting criticized for any sort of deals they get via federal legislation, which is: We create jobs, we support communities. As they've amassed more and more of the market share, there are people in Oregon who have very little choice where they buy their groceries. They sort of get to say, "We're taking a greater and greater stake in these places." I don't know that it's a fair trade-off that you become the low-cost grocer that also just doesn't pay a livable wage. They would argue the wages they pay are, at minimum, the legal minimum wage. Walmart said the average wage in Oregon is about $20 an hour, so that's a little higher than our statewide minimum wage. Walmart also said it pays significantly higher than the federal minimum wage, which is about $7 an hour and hasn't gone up in about 20 years.
So there are failures at a policy level to regulate income in the United States, not only taxing it, but ensuring these companies pay dignified wages. But these companies are basically saying, "We follow the law," and on top of that, they'll say, "We have these programs for college." So if our Walmart associates want to go to college, or Amazon has a program for deferring child care costs, or whatever, it's sort of these piecemeal things where they're like, sure, we're not paying these workers $30 an hour, but we are offering programs that might incentivize them to make choices that could help them save money, or earn more money, down the line.
It comes off as sort of performative. Maybe that's beyond the thrust of my perspective as a journalist, but I think there are a lot of people who work at Amazon who would rather get paid a dignified wage that is commensurate with the cost of living in their city than a program that might help pay for a few college courses for a proportion of employees. I think that's sort of what these companies are offering instead of robust health care, or, even if you work less than 30 hours, enough money to afford your groceries. A Government Accountability Office report that just came out found that since 2020, the number of Amazon employees using SNAP and Medicaid tripled across the country.
Dunne: Wow!
Baumhardt: So clearly, these investments that companies like Amazon are making in, let's say, helping employees afford to take college courses, it's not lifting all boats in the way that maybe just ensuring they could afford health care and food is. I would also add, when it comes to the major grocery retailers like Kroger, Safeway, Albertsons and Fred Meyer, I reached out to all of those representatives and was funneled into the Northwest Grocery Association industry group. So those companies chose, rather than talking directly with me, to go through their industry advocacy group.
Dunne: I see. And did you also speak with union representation for some of these employees?
Baumhardt: Yeah, I did. I reached out to SEIU, the chapter that represents a lot of the health care workers, in part because health care is an industry where a lot of companies are relying on Medicaid for their employees. Big health providers, Providence was on there, a lot of them, rely on Medicaid. But the bigger part is these Medicaid cuts will hurt hospitals. They will hurt the people working at hospitals: nurses, doctors, staff, down to the janitors. They will be worked harder, expected to do more with less. In Oregon, the expectation is $9 billion less for the health care system over the next 10 years. So these workers actually have a lot to lose when Medicaid gets cut.
I talked to a representative there, and it was basically: Pay your taxes, Jeff Bezos. You can afford hundreds of millions of dollars for data centers. You can afford to ensure your workforce has health insurance, so that, one, when an Amazon employee comes in sick, they are not at financial risk, and two, a hospital is not continually put in a situation where it's providing care that will never get paid back, which doctors have, you know, taken an oath to do. Luckily, we don't turn people away at hospitals when they need emergency care. But beyond that, these hospitals are going to see more and more people who have delayed preventive care. Every expectation is this will escalate the severity of the conditions people come in with. It will escalate the amount of work these health care providers are required to do with less. So it's sort of a lose-lose-lose unless you are an executive or shareholder of these companies.
Dunne: I find it fascinating that while we have a lot of challenges in the economy nationwide and here in Oregon, the unemployment rate is still at a pretty good level. We still seem to be doing OK with regard to the number of people who are working, but that could change, and could change fairly drastically given a lot of different factors. I'm wondering, these companies, when it's like, all of a sudden the unemployment rate goes up, could things get even worse for employees?
Baumhardt: I would imagine so. It's funny, I look at Amazon, which is obviously a big player in this AI revolution, and I've just been reading more and more about the impacts of this transition from certain work being done by humans to AI, whether it's a tool or a job replacement. The net result of it is, time will tell, but it might not be a ton of time until we get the tell. If rising AI use is part of a future wherein artificial intelligence plays a bigger role in people's lives, what is going to happen to a health care system that's already stretched? You could imagine many more people will be on Medicaid.
These new rules requiring a lot more reporting, to prove that a certain number of hours, about 80 hours a month, have been done work-wise or volunteer-wise, are expected to apply to about 60% of all the people in Oregon who are relying on Medicaid right now, and one in three Oregonians relies on Medicaid. Confusion about that program, or inconsistent work opportunities, could just leave a lot of those people uninsured. They don't know how to report, or where to report. Maybe one month wasn't 80 hours, but the next month was 120 hours, stuff like that this doesn't necessarily take into account. The presumption is that up to 200,000 people in Oregon could end up uninsured over the next decade, and those are still 200,000 people who would need to go to a hospital if something happened. It's 200,000 people who might avoid getting preventive care that would keep them out of a hospital.
It's easy to ramble on about the possibility of these impacts because there are so many, and there's enough historical context to sort of infer this would happen. Hospitals have seen what happens when Medicaid gets cut. This happens traditionally in Republican administrations, where funding for some of these safety net programs drops, and then all of a sudden you see higher child poverty rates, higher hunger rates, fewer people getting preventive care. We don't actually need to forecast the worst-case scenarios. We have enough evidence to suggest that when these programs get cut, people suffer, communities suffer, and we all kind of suffer. It raises the cost of health care for everyone.
Dunne: Alex, my last question has two parts. In your reporting, some states are sort of fighting back against this situation. Talk a little bit about what you found out there, and what might Oregon do with regard to this situation?
Baumhardt: Yeah, I will say first and foremost, my reporting here was inspired by watching Nevada. For the last five years, its Legislature has required its health authority to put out a list of the companies that rely most on Medicaid, based on how many times they were listed on income verification forms. It does the same for SNAP, and actually, I think Idaho does it for SNAP too. Having that basic information is very important for legislators, I think. Oregon tried this last year, to pass something similar that would require the Oregon Health Authority to put that list out every year. It didn't pass. It passed in the House for some reason, but didn't make it out of the Senate Rules Committee. I would imagine because it costs money, because somebody at the health authority would have to go through it. But I will say the folks at the health authority were fabulous about getting me this information. So, one, that would be an easy thing.
It's easy to see across states: The Government Accountability Office, in its analysis, found that in 11 states, Amazon and Walmart topped the list every year. In Nevada, Amazon and Walmart are the most frequently listed companies on these Medicaid applications and income verification forms. On top of that, states like New Jersey are starting to place a fee on these companies that have so many employees enrolled in Medicaid. So if you've got 50 to 249 employees in New Jersey who rely on Medicaid, you're going to start paying a couple hundred dollars in fines per person, to help subsidize the costs the state is paying for Medicaid that you, the company, are not. That fine gets higher as you have more and more employees on it.
So I think states are starting to say, "Hey, you've decided we're going to pay for your employees' health care instead of you, and there's going to be a cost to that." Washington attempted something similar this last session. Colorado did as well, I believe. Those didn't pass. I would expect you'll see more and more of that, especially as Medicaid sustains deeper and deeper cuts in the years ahead, and more and more people rely on it. So those are legislative options some states are taking. Oregon lawmakers don't have anything like that on their plate, as far as I've heard, yet.
Even the attempt to get the health authority to post a list every year of the companies most relying on Medicaid, I gather from the lawmakers who tried this last session that they are not going to bring it again next year. So I don't know what's going to happen here, but there are other states to look at. I think it'll be interesting to see what happens in New Jersey.
Dunne: She is Alex Baumhardt, senior reporter at the Oregon Capital Chronicle, doing great work there. Alex, always great to talk to you. Thanks so much.
Baumhardt: It's always great to talk to you, Michael. Thanks for having me.
Dunne: As we close, I did want to reiterate that we asked for comment from the industries detailed in the show, and no one got back to us. And that's the show for today. All episodes of Oregon on the Record are available as a podcast at klcc.org.
If the unabated growth of data centers has a singular moment where city approval of these projects reversed course, it might just have happened up the road in Hillsboro, a town that once opened its arms to data centers, and just surprised nearly everyone by voting for a building moratorium. That story, from The Oregonian, will be on tomorrow's show.
I'm Michael Dunne, host of Oregon on the Record. Thanks for listening.
