Taking psy emp and losing max HP does not feel very useful if the next roadblock after dealing with the first set of rat hounds in the generators is the beetles...
I didn't really notice this little tidbit. If you're going directly from Retake the Outposts to fighting the beetles, then you're rushing content and probably under-levelled, which will also make the game harder.
Right after Retake the Outposts, you've gained a level and are getting better at dealing with rathounds. That makes it a great time to go out the Level 1 gate of SGS and go kill rathounds in the three screens where they're easy. You've got the ones right outside where Bisson and gang are trying to clear the cave-in; you've got a group in the map immediately north there, which has - hooray, hooray! - an unlocked gate that you can go hide behind and zap the rathounds at your leisure with your psi powers which reach through gates (Temporal Distortion or Neural Overload); and you've got the group of rathounds outside the GMS Omega compound.
After killing all those rathounds and exploring the maps you've just opened up, you probably gained another level. Now you can go and do the easiest parts of the Underpassages. Go back to the screen right outside SGS and go down those stairs. There are four Lurkers in that map; two by themselves, two standing together. Take out the individuals first - because they're easier - and then save the game and try the pair. If you can't do it, no problem, come back later for them. But for now, you should go one screen east. There are several Lurkers in this map - one with a nice aluminized tac vest you might want; one with the first AR you're likely to find; one stealthy one near the gate behind which are locked some rathounds and some loot. At the very least, kill those three Lurkers and those rathounds, and get all that assorted loot.
You're still not ready to go fight the beetles! Now you can go talk to Jack Quicksilver and take his delivery quest. Buy one frag grenade to help with the upcoming fight, then go do the delivery which will be extra easy because you'll have cleared the map of rathounds so you won't have to worry about them adding in to the fight.
Now? Now, if you want, you can go start Hopper Round-Up. Assuming you farm a couple cave hoppers for the oddity (it's worth 150xp even on Classic) and turn in the quest to Mordre (100xp, IIRC), you may even be getting close to another level, making those beetles even easier.
Don't rush. If the game is kicking your teeth in, that's how it's telling you to go explore, level up, gear up, and learn how to optimize your character.