Middle Class Gets Hit Again--This Time It’s Health Care

It’s time for Michael Douglas to make another movie about an angry middle-class Southern Californian--and maybe it can be set in a health facility in Riverside or Santa Clarita in 1997, when somebody who used to have perfectly decent medical coverage blows up after waiting three hours to see a doctor under a program that costs 40% more than the old one. And it could happen, because middle-class America is being hit from all sides economically.

This is no joke. Back in 1991-92, the anger building across the country produced a pattern of middle-class political radicalization that reached from David Duke to Ross Perot--and to Bill Clinton, if you listened to his campaign promises.

Now, the middle class is facing a new round of economic pressures. You have to wonder how much longer they’re going to take it--especially in California, where Gov. Pete Wilson recently (and accurately) said the state is in its worst economic decline since the Great Depression.

Hollywood made movies about 1930s hardships, so why not about these? Instead of “The Grapes of Wrath” set in the Central Valley, we could have the frozen pizzas of wrath set in Ventura County. Health-care reform will be an interesting test, because notwithstanding all the hoopla coming from the Clinton Administration, the two most salient facts about how it’s going to be paid for are these: Clinton doesn’t want to give us the numbers or the financial details, and the middle class knows this and isn’t buying his package as yet.

Ah, but, you’ll say, about 50%-57% of the public backs the Clinton plan or has hopes for it. True, but the enthusiasm is strongest among lower-income groups, and the best evidence is that middle-class support is only in the 35%-45% range. The average American who now has health coverage is skeptical--and ought to be. People who don’t have coverage (or have inadequate coverage) will gain, and their gain will probably involve a loss--in dollars, quality of care or choice of care--by the bulk of the middle class now insured and reasonably content.

Admittedly, that’s not what the trumpeters of Clintonland are currently insisting, but if you don’t want to figure out the truth from the missing numbers, then you can also make an estimate by looking at what is happening in the rest of the industrialized West. There’s a growing realization that countries can no longer afford the expensive welfare-state programs set up in the glory days 20 or 30 years ago. From Canada and Australia to Britain, Germany and Scandinavia, the economies of health care are boiling down to a few painful words: We can’t afford what we thought we could.

In Germany, politics is being churned by debate on how to finance the costs of home nursing care for the elderly and handicapped. High-powered health issues in British politics this year have included talk about charging pensioners and children for prescription drugs that are now free, as well as ending free health care for those who can afford to pay.

In Canada, where high national health-insurance outlays are consuming the budgets of the various provinces, Prime Minister Kim Campbell has just provoked a storm of criticism for saying user fees might be imposed on care that is now free. In fact, it is hard to see any major Western nations where health care and cost issues are helping the incumbent.

The same problem is already developing here. To put tens of millions of new Americans on the health-insurance rolls, taxes and costs will rise for the great bulk of middle-class Americans now covered. For all but the small group who can afford high charges to go outside the system, the quality and choice of care will probably deteriorate because there is already a shortage of primary-care physicians. Waiting rooms are likely to be as crowded as rush-hour buses. By the year 2000, probably 70%-75% of the current middle class will have been losers.

Unfortunately, that’s the way things have been going for the middle class in general. Take Clinton’s tax package. Congress rejected one tax that would have hit right at the middle class--the broad-based energy levy--and the legislators modified a second proposal to increase taxes on Social Security for senior citizens. But the upper-middle class took a big hit with the steep income- and Medicare-tax increases starting at the $115,000 to $135,000 range, and in the last few years we have seen a revolution in the tax code: The highest rates are now on the upper-middle class rather than on the very rich investors and coupon-clippers with multimillion-dollar incomes. However, the rest of the middle class also remains in Washington’s gun sights because of the continuing talk about payroll taxes, consumption taxes, “sin” taxes and higher gasoline taxes.

In fact, if the 1990s were a theme park instead of decade, they would have an obvious name: Squeeze World. Taxes are the first squeeze, health care a second, and quality and compensation will probably be the third. Several new barometers of job opportunity have charted a real decline in the 1990s--and this will continue. Back in 1992, Clinton criticized the way that scarcely a week went by without some major corporation announcing large-scale job reductions. But now that he’s in the White House and they’ve been coming just as rapidly, he no longer seems to have any complaint.

Indeed, critics charge that his own support of the North American Free Trade Agreement will add to the pressure. House Majority Leader Richard A. Gephardt (D-Mo.) is opposing NAFTA because of the pressure it will put on the wages companies pay in the United States and on living standards.

Perot is charging that NAFTA would “destroy the middle class in this country.” If that seems extreme, virtually the same analysis is coming from the Democratic chairman of the Senate Commerce Committee. Sen. Ernest F. Hollings of South Carolina recently said of the Clinton Administration: “The crowd that came to town on behalf of the middle class is going to destroy the middle class.”

Finally, there’s the threat from Washington-based budget-deficit zealots who want to solve the fiscal threat to the Republic by means-testing Social Security and reducing federal entitlement benefits through a phase-out that begins with all those high-living folks making $10,000 a year. This is the sort of extremist stuff that politicians get in trouble for even thinking about.

Even so, important seeds are being planted. John and Jane Middle Class, in addition to everything else, are going to have to start watching out for their future Social Security and Medicare eligibility. Fiscal pickpockets are already gathering.

Americans have to hope that some of these fears won’t materialize. But if they do, it won’t make a nice movie--and it won’t make for nice politics, either. For the average citizen who might wake up one night from a nightmare that all four walls are closing in economically, it’s not a dream. For all too many in the middle class, it’s becoming a reality.