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Health care, class conflict, and the Democratic Party

William H. Stoddard of San Diego, California has some interesting commentary on the state of the debate between Clinton and Obama on what they want for US health care policy

Health care policy is a major issue in the Democratic Party’s choice of a presidential candidate. The final debate between Hillary Clinton and Barack Obama, in Ohio, spent a reported 15 minutes on it. Yet the mainstream news media in the United States consistently report that there are only very minor differences between the positions of the two candidates. Given this, the argument looks like little more than semantic quibbling over the meaning of the word “universal,” all too typical of Clinton’s struggle to contest Obama’s unexpected rivalry for the nomination.

But the mainstream news media have it wrong. There is, in fact, a vitally important difference between the two positions, though one that their worldview makes them ill equipped to recognize. The difference is that Clinton would compel everyone to purchase health insurance; Obama would not. The standard label for this difference in health policy debates is “mandate,” for what Clinton wants.

Clinton has been evasive about exactly how she would compel the purchase of insurance – which is not surprising, as talking about punishing voters is not a good selling point in an election. The state of Massachusetts, which has a mandate, imposes fines on adults who do not have health insurance. Clinton has not talked about fines, but has suggested garnishing wages or making enrollment compulsory on admission to any hospital.

Of course, Clinton promises to make health insurance affordable to everyone, through subsidies and through massive new regulation of the insurance industry. So does Obama. But what if their plans do not work out? Under Obama’s plan, adults who thought even subsidized health insurance cost more than they could pay would remain uninsured, and at least be no worse off. Under Clinton’s plan, they would be forced to sign up, or penalized for not doing so – and either way they would be hurt. And given that Clinton predicts that fifteen million Americans would remain uncovered under Obama’s voluntary plan, it seems that she anticipates that fifteen million people would have to be hurt financially to make her plan viable – or, perhaps, simply to justify her in calling it “universal.” Obama, in fact, has fairly clearly called attention to this difference. In the debate, he said, “We still do not know how Senator Clinton intends to enforce a mandate, and if we don’t know the level of subsidies that she’s going to provide, then you can have a situation, which we are seeing right now in the state of Massachusetts, where people are being fined for not having purchased health care but choose to accept the fine because they still can’t afford it, even with the subsidies…”

For libertarians, of course, which plan is less bad is a fairly straightforward question: the one that allows a measure of free choice is a lesser evil than the one based on coercive social engineering. And a non-trivial part of the electorate may feel the same way; where hard-core Democrats often favour Clinton’s views, independent voters are reported as less supportive of mandates.

But there are hard questions about mandates even from the perspective of the Democratic Party itself. On one hand, people between fifty and sixty-five (where Medicare comes into effect) consume substantially more health services than younger people. Younger people are more likely to decide their low health risks do not justify paying for insurance. So forced enrolment would compel many younger people to pay for insurance they would not purchase voluntarily – but the benefit of enlarging the pool and lowering insurance costs would go disproportionately to older people. And on the other hand, those same older people are much more likely to own houses, to have savings and investments, and in general to be able to afford health care. So what Clinton is proposing is a regressive redistribution of wealth, from the worse off to the better off. It is hard to see how this makes sense within the publicly announced ideology of the Democratic Party.

It does make a kind of sense, though, within a different framework – the version of class analysis propounded by the libertarian economist Murray Rothbard, which emphasized conflict between the people who pay for taxes and redistributive schemes, and people who benefit from them.

Who supported the two candidates? Leaving aside the obvious “identity” politics (blacks favoured Obama; women favored Clinton; Hispanics, a group often in conflict with blacks, favoured Clinton), Obama had unusually strong support from younger voters, and Clinton from older voters; that is, Obama from Democrats who would be hurt from Clinton’s scheme, and Clinton from Democrats who would profit from it. And Obama was favoured by Democrats with incomes above $100,000 a year, Clinton by Democrats with incomes below $50,000 a year. This is less obvious, but higher income people are more likely to be self-insured (so that forcing them to buy insurance would be to their disadvantage as they see it). So it looks rather as if Obama has managed to put together an insurance proposal that is more favourable to the very people who have been voting for him all along, and Clinton one that similarly appeals to her base. And the conflict between the two is a struggle between net victims and net beneficiaries of Clinton’s redistributive scheme.

Whether Clinton and Obama recognize this is not clear. Of course, neither of them discusses such issues in their speeches; they both have to present their ideas as being best for everybody. Health policy theorists certainly do not see any conflict – and most of them favour Clinton’s approach. But Obama’s statements suggest that he is aware that mandatory health insurance could hurt some of the worst off people in American society; that he thinks this is a bad idea; and that he is prepared to make an issue of it. In a small way, this seems to make him the lesser evil as far as health care is concerned. If nothing else, he does not seem to cherish the idea of forcing everyone into a comprehensive administrative scheme for its own sake, regardless of the cost to the people it claims to help. Health care policy experts seem to feel otherwise – and so does Clinton. This is, of course, the core position of the established Democratic Party, the authoritarian liberal party of American politics. Obama’s support might represent a realignment of less authoritarian voters increasingly unhappy with the Republican Party’s fall into militarism, theocracy, and big government. The Democrats could only be improved by playing for their continued support.

23 comments to Health care, class conflict, and the Democratic Party

  • Paul Marks

    Senator Obama also favours a mandate – people would have to buy health cover for their children.

    As in the most loved line of the collectivist “think of the children”.

    As for adults – yet more regulations and yet more government subsidies.

    In the end the objective is the same “universal coverage” with the means being slightly different – Senator Obama would have the taxpayers pay for health care for more people who say they can not pay for it themselves. He thinks (being deluded) that his regulations and subsidies would make buying health care less expensive (rather than more expensive).

    So, for once, the main stream media have it about right. There is little difference between Senator Clinton and Senator Obama.

    As for the overall policies – both promise more regulations and vast new spending programs.

    Trying to decide which of these two is the more collectivist is a waste of time.

  • Frederick Davies

    Hear, hear…

  • Jainine

    It is actually a good bit of analysis regardless of Paul’s bad tempered sneering. Sure they’re both “the enemy” (as if the ‘no child left unsubsidised’ Republicans weren”t) and if you expect top argue about their policies, it is a good idea top actually understand them. Nice one William.

  • RRS

    If it has not been said before, and if it has, to reiterate:

    These “issues” must ultimately separate insurance which is the transfer of risk from “healthcare,” which is a service or grouping of services (e.g., marriage counselling, et simil).

    The contract coverages for services which politicians have forced into what were once risk policies have so distorted the issues that they can’t be understood and analyzed until risks are separted from services, and paid for separately, as used to be the case 50 years ago with Blue Cross (pre-paid services with impact of costs spread in the same way as insurers spread risks over many policyholders) which covered the costs of our first-born.

    There must be recognition that insurance companies, as insurers, are in the business of spreading (not taking) risks. They are now forced into the business of administering the provisions of services.

    Would a Lloyds syndicate do that? NBL!

  • William H. Stoddard

    So, for once, the main stream media have it about right. There is little difference between Senator Clinton and Senator Obama.

    Disclosure of interest: I’m a 58-year-old self-employed man with no health insurance. I can’t afford it. The policy I had four years ago cost 16% of my gross income, enough so that I couldn’t afford to visit the doctor or dentist; if I came down with something catastrophic, I wasn’t going to find out about it in time to do anything. It would cost more now, because I’m older, and because health care costs have risen; it would cost ruinously more if I wasn’t allowed to choose catastrophic coverage.

    I, personally, don’t consider the difference between a plan that would let me stay where I am, and a plan that could force me into a financially ruinous position, to be “little.” Here in California, Arnold Schwarzenegger was pushing for a mandate—and I was, frankly, terrified of it.

    Of course you’re right about all the reasons Obama’s plan is bad. McCain, detestable though he is, has a lot of sound points about health care, starting with the need to reduce costs rather than just subsidizing it. But there is a difference between “bad” and “worse.”

  • Her in Australia we pay what’s called the Medicare levy, but only if you earn over $50,000 a year and only 1% of you’re income goes towards it if you’re over 30 years of age and have no private health cover.. that’s how they encourage private health here, which isn’t so bad, at the lowest threshold to pay it costs you $500, which is 1/3 of what the cheapest private health cover would cost for a year, so by the time those numbers even out you’d be earning more than enough to be able to afford private health cover..

  • So it looks rather as if Obama has managed to put together an insurance proposal that is more favourable to the very people who have been voting for him all along, and Clinton one that similarly appeals to her base. And the conflict between the two is a struggle between net victims and net beneficiaries of Clinton’s redistributive scheme.

    Whether Clinton and Obama recognize this is not clear.

    Whether their respective supporters also recognise Mr Stoddard’s interesting observation is even less clear. I suspect it’s purely accidental.

  • Paul Marks

    Jainine I was not “bad tempered” and I did not “snear”.

    I told the truth.

    William H. Stoddard.

    In the past (within living memory) the vast majority of people did not have health insurance – it only became a standard sort of thing in the 1950′s.

    You complain about the cost of it and I AGREE with you.

    However, the chances of either Senator Clinton or Senator Obama getting rid of the government subsidy programs and vast web of regulations that have made it so expensive are NIL.

    On the contrary both would increase both the Welfare State programs and the web of regulations – making health cover even more expensive.

  • Paul Marks

    Sorry for the double.

    Anyway:

    The best way to understand Senator Obama on health is to look at his ally.

    No not the “Weather Underground” terrorists in Chicago (that is a snear Jainine) but Governor Patrick of Mass.

    There is a lot to snear at in Governor Patrick’s past (supported every progressive, teacher approved, fad at law school [just like Senator Obama], GIVEN a top job at Texico by a Federal Court to oversee “anti discrimination” stuff, and so on), but it his policy position that is of most interest here.

    Governor Patrick acceptes the universal mandate in Mass agreed by former Governor Romney and the Democrats in the State Legislature – BUT he is open about holding that a “single payer” system would be better.

    This is, at heart, what Senator Obama’s position is.

    He does not think people should be forced to buy health cover individually – his real position is that the force should be collective on all the taxpayers to buy it single payer style (although you will not get him to admit this just now).

    Now Mr Stoddard may (or may not) think “that is good for me, the taxpayers will pay for my health care – not just in the E.R.s, but all of it”.

    But it would not turn out to be good – and not just because Mr Stoddard is himself a taxpayer.

  • Paul Marks

    Almost needless to say, in the past Duval Patrick was also close the Clintons – and (deep down) Hillary favors goverment single payer stuff also. After all her regulations would bankrupt the insurance companies so who would organize the health cover then (no prizes for guessing).

    I say again that trying to work out whether Senator Clinton or Senator Obama is the more collectivist is waste of time.

    It is just plain stupid – as they are both total collectivists dedicated to destroying what remains of civil society in the United States and the rest of the world.

    Their attitude to the rest of the world being indicated by their support for more powers for the United Nations and other insitutions of the “international community” to eliminate tax competition and so on.

    “That is an extreme view of the two Senators”.

    Perhaps – but it also the correct view.

    It is later than you think.

  • Saladman

    Obama’s support might represent a realignment of less authoritarian voters increasingly unhappy with the Republican Party’s fall into militarism, theocracy, and big government.

    Its possible that’s going on in a small way, but I would not overestimate it. These differences have not been widely covered in the US, as you noted. Obama’s success at identity politics, and his simultaneous exploitation of the “don’t hit the black guy” factor explains much of his campaign’s success to date.

  • Gabriel

    Obama’s support might represent a realignment of less authoritarian voters increasingly unhappy with the Republican Party’s fall into militarism, theocracy, and big government.

    Oh, grow up.

    Paul Marks is plainly right in the basic point that neither Obama or Clinton are worth a pig’s shit, but, for what it’s worth, the messianic rhetoric of the Obama campaign outdoes any “it takes a village” banalities and goes way beyond mere authoritarianism. On top of this Obama’s intimate links with genuinely evil far-leftists and his consistent extremist voting record make it abundantly clear that if both Democratic nominees were in a room and you only had one bullet, the sensible choice would conform to chivalric norms.

    This post is prime example of where RDS (like BDS only more generalised) gets you. Vote LP in the knowledge tat this will help the Democrats, fine, at least you’re sending a message, but apologetics for the very worst that that party has produced is another matter. This post is a disgrace.

  • No Gabriel, “Obama’s support might represent a realignment of less authoritarian voters increasingly unhappy with the Republican Party’s fall into militarism, theocracy, and big government” is a fair statement of what many of Obama’s supporters themselves think.

    Of course they are utterly wrong that he represents anything less authoritarian or for smaller government (by which his supporters usually just mean “smaller military”), but that is what they think. Also they do indeed think GWB is all for ‘theocracy’ (and yet generally hate the idea of war with genuine Islamic theorcrats).

    However the fact the post annoyed you is one of lives little pleasures.

  • and his simultaneous exploitation of the “don’t hit the black guy” factor

    I think it is not just “don’t hit the black guy”, but “let’s elect a black guy (or at least cheer him on), so we can feel progressive and enlightened”.

  • William H. Stoddard

    Obama’s success at identity politics, and his simultaneous exploitation of the “don’t hit the black guy” factor explains much of his campaign’s success to date.

    Identity politics explains the black vote for Obama, the Hispanic vote against Obama, and the female vote for Clinton—especially the older female vote. It’s less clear that it explains the youth vote for Obama, though that may be explainable in terms of generational identity. It’s hard to make it fit the support Obama has been getting from the wealthier and better educated Democrats, or from independent voters in Democratic primaries. I would be interested in seeing such an explanation, if there is one that I haven’t been insightful enough to think of.

    So far as generational identity is concerned, over the next few decades the United States is headed for a train wreck of generational conflict. Baby boom voters my age and older—and up to a decade younger—can be expected to join the current elderly by voting for government largesse for themselves, through Social Security, Medicare, or other programs (probably including some not yet created), no matter how much damage they do to the country or what burdens they place on the young; the self-centeredness of the elderly is one of the most reliable forces in American politics. But as the proportion of young, productive people falls, and the load on each of them grows, we are going to see increased resentment of heavy taxes and shrinking economic opportunities. Obama is marketing himself heavily to that population, and successful—which is not to say at all that his policies will actually benefit them. But if he attracts them to the Democratic Party in a long-lasting way, that party is going to have to deal with increasing internal tensions between two groups of supporters it can’t afford to lose.

  • Gabriel

    Perry, clearly Obama supporters believe that, just as New Liberals thought they were escaping authoritarian Victorian society in purusit of a new freedom, but I’d hardly expect a Libertarian website (if they had existed at the time) to state their deranged delusions regarding the Right as if they were fact. This sort of Democratic Liberty Caucas stuff is laughable bilge.

    As for why young people support Obama it seems obvious. In schools and the mainstream media the dominant idelogical instructions teaches that the summum bonum lies in state asssisted living, that freedom consists entirely of gay ‘marriage’ and state funded abortion, that the two highest moral goods are ‘hope’ and ‘progress’ and that conservatism is a mental disorder inherently prone to Nazism. Young people are, first, more receptive to the media and, secondly, are either currently at or recently were at educational institutions so they believe most uncritically in this ideology.
    The loathsome empty demagoguery of Obama perfectly exemplifies this ideology so naturally most young people like Obama. It has nothing to do with cod-marxisant class interest.

  • Paul Marks

    I believe you are correct Mr Stoddard.

    As time goes on the cost of reforming the entitlement programs rises – so it becomes more and more difficult to reform them.

    Thus the chance of reform falls and the chance of crack up and breakdown rises.

    Oddly enough the handful of Democrats who are even vaguely in favour of reforming the entitlement programs support Hillary Clinton.

    I know this is crazy (given how Senator Clinton supports even more entitlement programs), but it happens to be true (for whatever reason).

    Ex Senator Bob Kerry of Nebraska.

    The Democrat Senator from Indiana (I can not even pronounce his name – so spelling the name is out of the question).

    And so on.

    It is the real brain dead Democrats (like Edward Kennedy) who support Senator Obama.

  • Paul Marks

    I do not know about Senator Obama’s supporters.

    After all young fresh faced people with full heads of hair are likely to make me irritated even before they start mindlessly charting “change”, “hope” and “yes we can” and then fainting with joy at the sight of their beloved one.

    However, Senator Obama himself I do know something about.

    Theocracy:

    He is closer connected to a Church than George Walker Bush is – and it is a deeply nasty one.

    Use of force:

    A President Obama would use military force at the drop of a hat – if it was in line with the views of the “international community”.

    Civil Liberties:

    Senator Obama is all in favour of these – as long as they are understood in a Progressive sense of course.

    Reactionary opinions and people are outside this.

  • Jim

    You know what terrifies me about all three front runners?

    Not one of them – NOT ONE! – has mentioned the word “deficit” for more than seconds at a time; it’s all entitlement programs, and not the merest sniff of consideration as to how an increasingly non-viable U.S. economy is going to pay for them.

    I suppose they could borrow their massive new Medicare costs from China for a little while…

  • Nate

    I rather think the difference between supporters of Obama and Hillary is obvious. Hillary is an unlikeable bitch. She’s mean, nasty, not a nice person, has a wooden personality, and is about as uninspiring as a county tax administrator.

    In terms of policy, there is probably little to separate Obama from Hillary, but from what I understand he’s actually a “nice” guy. (Granted, he’s paving that road to hell with his good intentions.)

    Young people tend to be more idealistic and seek inspiration. He gives it. She doesn’t. The End.

  • M.L.

    To be fair on Hillary and Obama, they are honest that they are for big government. And though I disagree with their views, at least they are honest about it. Republicans talk about being for small government and lower spending as propaganda, but they don’t mean any of it, as they produce the exact opposite in office. Movement ‘conservatives’ can bang on about how wickedly socialist Obama and Hillary are. Doesn’t mean a damn thing coming from them while they keep nominating people like Bush and McCain, as both are pretty much socialists themselves. As for foreign policy, both parties do admirably well at getting America entangled in quagmires.

  • William H. Stoddard

    Some of this depends on your model of the behavior of politicians. I’m a libertarian, so I’m strongly ideologically motivated, and it’s natural for me to assume that everyone else is, too. But that’s not necessarily true of all politicians. It’s likely true of Ron Paul, and earlier in my life it seemed to be true of George McGovern and Barry Goldwater. But many politicians are a different sort of being: entrepreneurs operating in a very peculiar market, concerned above all with what sells.

    Certainly, both Clinton and Obama have said things to indicate that they would prefer outright socialism in medical care. But Clinton tried to sell that one, back in the 1990s when her political career wasn’t at stake. It was a complete failure. And apparently both Clinton and Obama have learned from that; at least, both of them are offering proposals that claim to preserve private medical insurance and private medical practice, while subsidizing them for people who can’t afford them. That is, they’re trying to market something that the public will buy. But they’ve learned slightly different things, and are aiming at slightly different markets.

    A recently published survey reported that a plurality of Democrats favored mandates, but a plurality of independents and Republicans opposed them. Clinton has been focusing on selling herself to the core Democratic voters; Clinton favors mandates. Obama has been focusing on selling himself to independents; Obama opposes mandates. I somewhat doubt that someone who’s campaigned as effectively as Obama has failed to recognize that difference and think about it.

    I haven’t seen any study of differences in attitudes toward mandates between younger and older voters. I would be interested if anyone has such data to report. On one hand, younger voters might be idealistic socialists who want universal health care; on the other hand, a lot of younger voters are uninsured and might be afraid that mandates will cost more than they can bear to pay. Or both. A friend of mine, a young woman who’s an Obama Democrat and favors universal health care (and yes, she and I have talked about the issue), wrote about disliking Clinton’s mandates, saying among other things, “My little brother is currently living in Massachusetts and is suffering under Mitt Romney’s “universal health care” system, which is to say that he just graduated college with an art degree and is working but can’t find a job anywhere that can afford to get him health insurance, so he keeps getting hit with these huge fines for being uninsured, and right now, he’s scrambling to find some expensive private insurance that will give him basically no care, and on top of that, he has to pay these giant fines, so now he’s terrified that in the name of “universal coverage”, he can neither pay his rent nor afford to get sick.” Even socialists may dislike or fear overt, obvious coercion.

    But setting that aside, given the redistributive effects of mandated health insurance purchase, if mandates go through, those young voters are going to be hurting pretty badly four years down the road, to pay for health care for other people, mostly older people with more money than they have. That’s a great way for the Democrats to capture the youth vote in 2008 and completely lose it in 2012. Mandates could make Clinton or Obama a one-term president. Clinton does seem to be ideologically motivated enough not to want to think about that—and, ironically, I find I sympathize with her, because I’m ideologically motivated myself, though hardly in her direction. But Obama could be thinking about his own long-term marketability more than about his ideological beliefs.

    And, I admit, I’m speculating, based on reading the news and on opportunistic personal observations. I could be wrong.

  • Paul Marks

    To ML and others:

    Compare John McCain voting record on government spending with that of Senator Clinton and Senator Obama.

    This “they are all the same” stuff is B.S.