The national Covid-19 Public Health Emergency (PHE) declaration ends today, May 11, 2023. While the coronavirus is still a serious public health issue and the federal Centers for Disease Control and Prevention will continue to distribute Covid-19 vaccines, the reporting frequency of some virus-related data will now be weekly instead of daily and insurance companies will no longer be required to waive the costs of Covid-19 tests or provide them free. Because the virus does not pose the grave danger to public health that it did for much of the past three years, other federal emergency provisions are also coming to an end. Chief among these is that recipients of Medicaid, the federal-state health program for low-income persons, will again be required to regularly recertify that they are eligible for this coverage. During the Covid-19 emergency, the recertification requirement was waived.

Since over a million city residents have been added to the Medicaid rolls during the pandemic, this could mean that thousands of residents could soon lose their health insurance coverage. As of March, 4.4 million city residents –roughly half of the city’s population – had Medicaid coverage. The number meeting the income test to qualify for Medicaid has risen by 1,024,000, slightly over 30 percent, since February 2020. The State Health Department will begin the process of redetermining eligibility for public programs this spring and says it will assist individuals who are no longer eligible for Medicaid in qualifying for such alternative coverage as Child Health Plus, the State’s Essential Plan, or an Affordable Care Act marketplace health plan.

The 30 percent jump in Medicaid rolls is an indication of the extent to which economic hardships mounted in dramatic fashion in New York City as a result of economic dislocations triggered by the Covid-19 emergency. The figure below shows the sharp rise in recipiency levels for Medicaid and the other two main forms of public assistance, New York City Cash Assistance (provided under the federal Temporary Assistance for Needy Families program or the State Safety Net Assistance program) and the Supplemental Nutrition Assistance Program (SNAP, the federal program providing food assistance to needy families formerly known as Food Stamps). The number of persons receiving Cash Assistance jumped by 47 percent, an increase of 149,000 persons to 467,000, and the number of SNAP recipients increased by about 21percent, or 305,000 persons, to nearly 1.8 million.

The number of Medicaid recipients in New York City is now at an all-time high, while the number receiving Cash Assistance is at its highest point in 20 years, and the number of SNAP recipients is at the highest level since 2013. The fact that so many more people receive SNAP benefits than Cash Assistance is partly explained by the fact that many families with low-wage workers qualify for SNAP but have incomes above the very low level needed for Cash Assistance eligibility. While there were 467,000 persons receiving Cash Assistance in March of this year, over the past 12 months there were a total of 647,000 “unduplicated” city residents receiving Cash Assistance at some point.

The figure above shows the sharp increase in Cash Assistance recipiency following the ending of all federal pandemic-related unemployment insurance (UI) programs on Labor Day, 2021. An estimated 750,000-800,000 city residents lost UI benefits that averaged $500 weekly. Hardships among many New Yorkers clearly rose sharply at that point. 

Even as New York City’s recovery has continued over the past two years, the number of those experiencing hardship rose and many people turned to one or more of these programs for assistance in providing for their families. While the number of payroll jobs rose by nearly 200,000 in the pandemic’s third year (March 2022 to March 2023), the increase in public assistance during that time surpassed the increase in the prior year (March 2021-March 2022). Over the 12 months through March 2023, 60,000 people were added to the Cash Assistance rolls, there were 63,000 more SNAP recipients (most of those on Cash Assistance also receive SNAP), and there were 259,000 more city residents covered by Medicaid.

Besides federal supplemental and extended UI benefits, other forms of federal pandemic-related economic assistance have also ended. Two American Rescue Plan Act programs ended by the close of 2021: the third round of Economic Impact Payments; and enhanced (and refundable) Child Tax Credits that provided an additional $1000-$1,600 per child. SNAP emergency allotments that provided an average additional monthly payment of roughly $50 per recipient ended after the payments for February 2023. The emergency SNAP allotment essentially covered the cost of the 19 percent increase in New York City food prices from the beginning of 2021through March 2023.

New York State’s Excluded Workers Fund completed disbursements at the end of 2021 and the State Emergency Rental Assistance Program stopped accepting applications in January 2023. The enhanced New York City Earned Income Tax Credit (EITC) that began in 2022 is permanent and provides an average annual benefit of $313 per low-income household. Nevertheless, this amount is a fraction of the $2,400 that a four-person family will lose as a result of the ending of the SNAP emergency allotment, or of the value of the expanded 2021 Child Tax Credit.  

One thing to keep in mind in thinking about why economic hardships among city residents are so much greater than before the pandemic is that the employment of New York City residents has not rebounded as much as the total number of payroll jobs in the city. While the March total payroll numbers show that New York City is only 31,000 (or 0.6 percent) below the pre-pandemic February 2020 level, the employment of city residents is 166,000 (or 4.1 percent) shy of the pre-pandemic level. Commuters hold a sizable portion of the payroll jobs located in New York City, particularly in high-paying finance, media, and professional services where remote work was possible. Proportionately fewer of them lost jobs than city residents, who were much more concentrated in the face-to-face industries (that were not amenable to remote work) bearing the brunt of pandemic dislocations. 

While public data is not available regarding the demographics of those affected by the rise in economic hardships, we do know there’s a wide discrepancy in unemployment rates by race and ethnicity in New York City. As our previous Economic Update showed, there has been a sharp divergence in unemployment rates between white and Black city residents over the past year, with the Black unemployment rate rising to 12.2 during the first quarter of 2023 while the white unemployment rate fell to 1.3 percent. Hardships almost certainly are heavily concentrated among people of color, considering that the first quarter underemployment rate (which factors in involuntary part-time work and counts discouraged workers as well as unemployment) for whites was 4.3 percent but 15.8 percent for Blacks, 13.5 percent for Hispanics, and 12.2 percent for all BIPOC (including Asian and multi-racial) workers.

The recent True Cost of Living report by the United Way and the Fund for the City of New York found that in 2023 half of city residents lack sufficient income to meet the cost of basic necessities. The study estimated that a two-adult family with a preschooler and a school-age child would need an annual income of more than $100,000 to cover the cost of housing, food, health care, and transportation in any borough. Not surprisingly, income inadequacy is widely disparate, with 65 percent of Latinx, 58 percent of Black, and 51 percent of Asian, Native Hawaiian, and Pacific Islander households struggling to make ends meet compared to 32 percent of white households.

The sharp pandemic-related rise in economic hardships among hundreds of thousands of New York City residents will further exacerbate New York City’s income inequality, which resumed growing over the past three years after stabilizing in the half-dozen years prior to the pandemic. The lack of sufficient action in Albany as the FY 2024 State budget was enacted does not augur well for the economic well-being of New York’s low- and moderate-income working families. No action was taken to spur affordable housing or require just cause when families are threatened with eviction. The State minimum wage will rise to $17.00 by 2026 in New York City and its major New York suburbs ($16.00 in the rest of the state). However, considering the rapid rise in consumer prices in recent years, the purchasing power of the minimum wage in 2026 will be 13 percent less compared to 2019. 

The impact of the formal end of the Covid-19 Public Health Emergency will need to be monitored very closely in terms of the impact on access to health care in New York City. And more broadly, public policy must come to grips with the uneven and incomplete Covid-19 recovery that has stranded and heightened hardships for thousands of New Yorkers.