No, Rachel, No! This "Health Reform" Could Lose the Middle Class for Dems

I read with interest Mike Elk's assertion that "liberal elitism will make Sarah Palin President," as well as Oliver Willis' response that "some people are, sadly, stupid." But if Democrats and progressives are really concerned about middle-class votes - and they should be - it's statements like this one by Rachel Maddow that should concern them:

And this weekend, the House grabbed the brass ring that president after president and Congress after Congress have wanted to grab and failed: health reform at last-the kind of once in more than a lifetime historic achievement that could brand the Democratic Party and inspire voter loyalty for a generation.

Now, as a conflict-of-interest disclosure, I love Rachel Maddow's show. And she gets better every week. But when I heard her say these words on Monday's show, I felt like an actor in one of those slow-motion disaster scenes, watching a friend make a tragic mistake and wanting to shout "No-o-o-o-o- ...." (Remember, it's in slow motion.)

I think that's what Rachel was doing, too, when she went on to rightly slam the Stupak Amendment. (For an idea of how that amendment might look to a visitor from another planet, go here.) But, Stupak Amendment aside, it's this sort of rhetoric that troubles me the most right now. This is not the time for people, especially progressives, to congratulate themselves over this deeply flawed bill. There's still time to fix its most egregious flaws, which are by no means limited to the highly objectionable (and politically foolish) Stupak Amendment. I hope Rachel will reconsider.

Any possible amalgam of the House and Senate bills, as they now stand, will look very much like the plan once called Romneycare in Massachusetts. It will be highly (if not entirely) dependent on private health insurance, will lack meaningful price controls, and will be forced of necessity to leave a great many pople uninsured even after passage. (I did a back-of-the-envelopeestimate in April 2008 when many progressives were confusing "mandates" with "universal coverage" and came up with 8 million uninsured. Today the CBO says 9 million.) This bill will do great things for the lower-income uninsured - which is to be celebrated - but it will do so by placing disproportionate financial burdens on the middle class.

When politicians and health policy experts were celebrating the Massachusetts bill, only a few of us sent out warnings. But the scenario has played out pretty much the way our minority reports predicted. Politically, the Massachusetts bill - which addresses a much smaller problem than the one we face nationally - is mildly popular overall (51% favorability), but unpopular with those it has affected personally (56% negative vs. 44% positive.)

And who would that be? The middle class, mainly.1 That scenario's likely to play out again on a national scale. those who currently have health insurance will face a future of rising premiums, starting next year, which these reforms would do little or nothing to address. Most of them will not have a public-option choice, and even those that do will find it lacks cost-containment "teeth." And, while there's some credibility to Goldman-Sachs' doomsaying, the insurance companies will have a decent revenue stream that can be enhanced with further premium increases. The Goldman figures address relative forecasts which drive stock prices (will margins improve or narrow, etc.) rather than absolute revenue numbers.

This hardly sounds like "a lifetime historic achievement that could brand the Democratic Party and inspire voter loyalty for a generation." It sounds more like a bill that will help some people, leave others where they are, and place new burdens on still others. It also sounds like a bill that can be used to make political capital for the GOP, who can paint Dems as "the party that doesn't understand the middle class." With all that, plus some populist right-wing rhetoric about Wall Street's coziness with Washington, you could have a winning formula for Republicans.

Why say this now? Because there is still a chance to make this bill significantly better. Democrats can strengthen the public option, reconsider price controls, and make sure not to pass that "Cadillac" tax. (David Leonhardt's defense of it in the New York Times is based in part on a decades-old RAND study that has now been seriously challenged methodologically - I hope to discuss that at more length soon).

Nobody's going to bother addressing some of this bill's more troublesome provisions if smart, engaged progressives like my hero Rachel engage in premature congratulation, rather than providing Democrats the tough criticism needed if we are to get a better result than the one we're likely to face today. And any criticism that is provided will be read with the belief they don't really need to respond, since this group is already thrilled with at least the House's bill exactly as it's written.

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1This point applies specifically to families who will be mandated to purchase coverage, but will be eligible for little or no assistance paying their insurance premiums (which, as a reminder, neither the House or Senate bills would do much to contain). This will most strongly affect those who make roughly $66,000/year income and upward for a family of four, and who do not receive insurance through their employer.

Comments

[j.mckenna42@yahoo.com]

Price controls have been tried before under FDR and Nixon with disastorous results. The government is unable to successfully run a railroad, the post office, medicare and social security. All are headed for bankruptcy. It is unwise to turn over 15% of the economy to the government. To increase costs on businesses and consumers in the time of the great recession is lunacy.