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Town hallers angry at Democrats' health care plan for right reasons

By David Frum, CNN Contributor
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STORY HIGHLIGHTS
  • Town hallers know government wants to change Medicare in ways they don't like, Frum says
  • He says changes won't kill Grandma, but Medicare will cover less and cost more
  • Changes will benefit the uninsured, some of whom can't pay for insurance, he says
  • Frum: Resistance to Obama's plan comes because it will be an income transfer program

Editor's note: New CNN contributor David Frum, resident fellow at the American Enterprise Institute, was a special assistant to President George W. Bush in 2001-2002. He is the author of six books, including "Comeback: Conservatism That Can Win Again." Frum's first book, "Dead Right" (1994), was described by William F. Buckley as "the most refreshing ideological experience in a generation," and by Frank Rich of The New York Times as "the smartest book written from the inside about the American conservative movement." He is the editor of NewMajority.com.

(CNN) -- "Keep the government's hands off my Medicare." Those words -- quoted by so many TV talking heads -- never seem actually to have been spoken by anyone. It's like that poodle in the microwave story: Everybody has a neighbor who heard it from his cousin.

The town hallers were angry, but they were not crazy, and they were not stupid. They knew perfectly well that Medicare is provided by the government. They also knew that their government is proposing to change Medicare in ways they do not like.

The health care reform plans backed by President Obama would cut hundreds of billions out of the the growth of Medicare spending over the next 10 years. More ominous for seniors than the dollar figure is the plan behind the number.

The president wants to reduce spending on Medicare Advantage, the privately run plans that offer seniors a better deal than conventional Medicare. Over the longer term, the president aspires to shift Medicare patients to teams of health care providers paid by the year, instead of individual doctors charging fees for each particular service -- rather than by the particular medical service they perform.

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The changes the president has in mind won't kill Grandma. But they will change medicine in ways Grandma may find uncomfortable. Ten years from now, Grandma probably won't have a personal doctor. Her Medicare will cover less -- and cost more.

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Medicare was under pressure even before the election of Obama. The gap between the future revenues and future obligations of Medicare and Social Security is estimated by the Social Security trustees at some $45 trillion. How much is that? Adjusting for inflation, it's the cost of fighting World War II -- 10 times.

Medicare is the single biggest spending commitment of the United States. As Obama stacks enormous new health care spending commitments atop the old, Medicare's already bleak future grows dimmer still.

Who wins as Medicare loses?

The short answer is: the uninsured. The president will use the money squeezed from Medicare to extend some form of coverage to the 35 million to 40 million people estimated to lack health insurance. And who are these people?

About one-quarter of them are foreign-born. Recent immigrants to the United States -- unlike the immigrations who arrived between World War II and 1970 -- have tended to be very low-skilled. Their labor is just not worth enough to their employers to support the high cost of an American health insurance plan: $13,000 a year, on average, for a family of four.

So here's how the world looks to a Medicare enrollee:

Over the opposition of some 80 percent of the American people, your government allowed millions of poor newcomers to enter the country, many of them illegally. (Over the past 10 years, half of all immigrants to the United States have arrived illegally.)

These people cut the lawns of your more affluent neighbors, tended their babies, cleared their tables after their restaurant meals.

If you were not so affluent, they reduced your wages and crowded your schools, highways and hospital emergency rooms.

Now you are being told that your old age will be made less comfortable to accommodate them. Unsurprisingly, you don't like it.

The debate about immigration and health care has centered on whether immigrants who are here illegally might qualify for coverage under the Democrats' reforms. Theoretically, they will not be eligible, but since Democrats have so far voted against enforcement measures, some illegal immigrants will no doubt slip through.

But the debate over illegal immigrants is a proxy for something larger and more unsettling to older Americans. The problem is not illegal immigration, it is all low-skilled immigration, legal and illegal. By importing tens of millions of people who earn too little to pay for their own health insurance, we have made this supremely difficult social problem radically more difficult than it ever needed to be. With "Obamacare," the bill for four decades of permissive immigration has at last come due.

Since the 1930s, the United States has run two different kinds of government social programs.

One kind of program is sustained by contributions from the very same people who will benefit from the program in future: Social Security, unemployment insurance, workers' compensation. These programs have never been controversial.

The other kind of program taxes some for the benefit of others: Medicaid, social housing, the old welfare programs for the poor. These programs have always been intensely resented.

Medicare was the first kind of program: social insurance. Obama's public option will be the second kind of program: income transfer.

That's the explanation for the resistance the president is encountering. And it's the emotion that explains the actual quote -- not the bogus quote -- we heard from so many town hall protesters this summer: "Fix old. No new."

The opinions expressed in this commentary are solely those of David Frum.