Class and Health Care Reform

Over at TNR, special correspondent Thomas B. Edsall raises provocative questions about the coalition of wealthy and poor that elected Obama.  Will they stand together?  Below, excerpts from his post, and my comments:

“The health care debate has exposed the ideological tension in Barack Obama’s political coalition between moderates and liberals. But it has also offered hints of how another, less obvious divide built into the Democratic majority could wreak havoc on the administration during the years to come.

“In 2008, the Democratic Party blossomed into a successful alliance of the upscale and the downscale--wealthy and needy marching hand in hand, sharing animosity to George W. Bush and the war in Iraq. The extent to which Democrats are relying on the far extremes of the income spectrum is striking. Democrats have generally performed well among low-income voters in the past, but now, the phenomenon has become more pronounced. Voters from households making less than $30,000 backed Obama by 31 points last November. That margin was 13 points higher than Jimmy Carter’s advantage over Gerald Ford with poor voters in 1976--and 21 points better than Walter Mondale’s advantage among the same demographic in 1984.

“Democratic gains among the rich have been even more dramatic and, given the party’s history, surprising. Carter in 1976 and Mondale in 1984 were crushed by the wealthiest voters. Obama, by contrast, actually carried those making $200,000 or more by 6 points. True, these very affluent voters make up only 6 percent of the electorate, but Obama fared well in other upper-income categories too. Among non-Southern white voters--that is, voters living in states a Democrat must carry or have a shot at carrying to win an election--Obama claimed a majority of those making $80,000 or more. And this group makes up over 30 percent of the electorate outside the South.”

Here I would note that Obama appealed to well-educated progressive voters—and since education and income are closely correlated, this means that he drew affluent voters.  “Obama needed this strong showing at opposite ends of the income spectrum because he was far weaker in the middle. The two previous Democratic victors, Carter and Bill Clinton, won moderate-income voters--Carter in 1976 by 5.7 points and Clinton in 1992 and 1996 by an average of 6.5 points. Obama merely split these voters with John McCain.”

Unfortunately race may have been a factor. Many middle-class white voters who embraced Carter and Clinton rejected Obama.

Edsall continues: “If the president’s top priority were foreign affairs, the sharp class dichotomy in his coalition might not be so significant. But his agenda has clear class implications: universal health care aimed at helping the uninsured; stimulus spending heavily oriented toward the unemployed; and a financial bailout that aided Wall Street while enraging lower-income voters. And so, while the rich-poor alliance was enough to get Obama to the White House, there is reason to wonder how long--or how well--a coalition divided so sharply along economic lines can survive the process of governing.
"You can see the income-based split over health care most clearly in poll numbers. In a recent Gallup poll, those making less than $30,000 urged their congressmen to vote for health care reform by 13 points; those making $75,000 or more took the opposite position by 16 points.”

For low-income families, health reform will guarantee access without little additional close. Those earning $30,000 will qualify for large subsidies to help them pay their insurance premiums. By contrast  those making $75,000 or more won’t.  This won’t matter to the majority in this group: most already have generous employer-based insurance. On average, employers who offer insurance pay 75% of the premium for workers earning over $75,000. But under reform, self-employed Americans, as well as those working for smaller companies will be asked to buy their own insurance—and, for the upper-middle class, that will mean pay the full cost themselves.   The good news is that the Insurance Exchange will let them buy insurance at group rates; they will no longer have to pay the exorbitant rates demanded in the individual market. More importantly,  insurers won’t be able to reject them—or hike their premiums—because of pre-existing conditions. And all of the reform bills under consideration cap out-of-pocket spending at $5,000 a year ($10,000 for a family.)  This means that if your family is in an accident, and winds up with medical bills totally $200,000, you will be expected to pay just $10,000—no matter how much you earn.  Most hospitals and doctors would let a family pay the $10,000 over time, which means no one should face a medical bankruptcy.

These are all good reasons for more affluent families to welcome reform. Even so, since many have good employer-based insurance, some are satisfied with the current situation—and wary of any change.  Moreover some individuals earning over $75,000 may resent a mandate telling them that they must buy insurance—especially if they are  single, are young and healthy. Much depends on whether insurance regulators let insurers sell them “dare-devil” policies for the young—cheap, stripped down insurance that doesn’t include items like maternity benefits, or physical therapy after surgery.  The problem here is that if such policies are allowed, those who need comprehensive insurance will have to pay higher premiums.

Edsall points  out that you can see the class division, not only when you  poll individuals, but also  “in the behavior of Democratic politicians representing wealthy states. Reacting to a suggestion that rich areas of the country are spending too much on Medicare under the current system, Senator John Kerry said, ‘States like Massachusetts are concentrated centers of medical innovation where cutting-edge treatments are tested and some of the nation’s finest doctors are trained. This work might cost a little more, but it benefits the entire country.’  For her part, Senator Dianne Feinstein of California cut right to the chase: If health care reform means California is going to take it on the chin, she said, ‘I can’t vote for it.’"

This is truly distressing. Senators like Kerry and Feinstein are capable of understanding what people such as  Dr. Atul Gawande have been telling us:  in areas where medicine is money-driven, millions of health care dollars are wasted on over-priced, unnecessary tests and treatments. And this is not just a waste of money; when treatment is not needed patients are exposed to unnecessary risks.
Kerry and Feinstein are being provincial—though perhaps this is to be expected.  As one HealthBeat reader recently noted:  “We have research demonstrating that Medical centers like Mayo Clinic Scottsdale, Kaiser Bay Area, Group Health of Puget Sound, Geisinger Clinic [in Pennsylvania], and many others outperform -- cost less and have better results” than many marquee medical centers in Massachusetts and California.

“I do expect a lot more push back on this in the future,” he added, “for two reasons: First it runs directly into the ego and reputation of many prestigious medical systems and supposedly sophisticated geographic areas of practice. The idea that people in small cities in the West and Midwest are doing a better job than silk stocking medical care in large cities on the coasts and in the Sunbelt is very threatening.

“Second, it remains a truism that one person's medical waste is another person's new beach house.”

Edsall concludes: “The point is not that class divisions on any of these issues will single-handedly undo the opportunity to pass a given piece of legislation. It is also quite possible that the combined weight of these rich-poor splits won’t end up doing the administration much overall harm. And, even if Obama’s coalition ends up wracked by class-based antagonism, Democrats may be able to put off a day of reckoning because of Republican disarray.

“Still, it’s hard to dismiss the possibility that this intraparty schism based on income might create headaches for Obama. The Democrats have a substantial majority on Capitol Hill, but, with few Republicans willing to break ranks, any Democratic faction has the ability to wield veto power more or less whenever it wants. Obviously, these factions break down along many different lines--but class is certainly one of them.”

In the end, Edsall suggests that perhaps progressives should make a concerted effort to win back the middle-class.  But this, I think, would be difficult.  Those middle-class Americans who have voted for conservatives and “Blue Dogs” just don’t share the values that progressives embrace. When it comes to thinking collectively, equality regardless of race, gender or sexual preference, and separation of church and state,  there is  a wide divide between liberals and some middle-class Americans.

Progressives have a better chance, I think, if they try to unite lower-income Americans—providing programs that help low-income households, regardless of race. Secondly, they appeal  need appeal to fair-minded, educated Americans of all classes by talking about ideas, educating as they go along.

I recently participated in a round table discussion with long-time political organizer Marshall Ganz (on Grit TV the Laura Flanders Show)  and he emphasized that this is what building a movement is all about: “moving minds from a place they are to a place they could be.” Building a movement is “not marketing” or “packaging” said Ganz, who is a lecturer at Harvard’s Kennedy School of Government.  It’s not about bumper stickers. It’s not about telling people what they want to hear. Appealing to“narrow self-interest” will never build a movement that moves history forward.

So I don’t think that progressives should try to appeal to the “class interest” of the middle-class—and let me be clear, I don’t think this is what Edsall meant. But, inevitably, this is how some readers will interpret him. They would argue that liberals should try to recapture the voters who put “Blue Dog Democrats” in office. Instead, liberals should offer all Americans a generous vision of the nation that encourages us to think in terms of “we” rather than “me and mine.”  If we can use ideas—and moral argument—“to move Blue Dogs from the place they are to a place they could be” this would represent real progress. If not, we will have to move forward without them.

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The President’s 2010 Budget lays the groundwork for reform of the American health care system, most notably by setting aside a deficit-neutral reserve fund of $635 billion over 10 years to help finance reform of our health care system to bring down costs, expand coverage, and improve quality.