Akbar and Teresa, a husband and wife team, run the coffee shop across the street. They make good coffee and sandwiches for the workday crowd. We go there a lot, so we have gotten to know each other. We’ve learned about their health insurance costs, about Teresa’s cancer, about their kids’ college tuition, about their drop in customers in this great recession.
Akbar and Teresa don’t smoke. They walk regularly. They take good care of their health. And they don’t have a choice about health insurance. They have to have it, and as a small business they pay on the barrelhead for it. So what does the new health care law offer them? Actually, quite a lot, and immediately.
As a small business, with average wages under $50,000, they will receive up to a 35 percent tax credit for their health insurance, retroactive to Jan. 1. For Akbar and Teresa, that means several thousands of dollars in savings. It means that they will be able to keep their shop going, while also knowing they have health coverage.
That’s important for them and for the little business community that gathers on and off for coffee, lunch, and Akbar’s observations about the day. It means the economic survival of one more retail business providing good services (and coffee). Multiply this by the quarter of million small businesses in our state, and we can begin to understand the impact of health care reform for both good health and economic stability.
My colleague’s mom is in her 80s. Three years ago she was diagnosed with cancer. With good treatment, she has recovered and her cancer is in remission. To help keep it that way, she takes a pill every day. This costs her about $250 a month. So that means that to pay for this one drug, she finds herself right in the center of the Medicare prescription drug donut hole, where Medicare doesn’t pay for any prescription costs between $2,700 and $6,000. What does health care reform offer her? An immediate $250 check from the federal government to help pay for her “donut hole” costs.
There are about 200,000 seniors in our own state who fall into this donut hole. They will all get this reimbursement. The federal government will track when seniors enter the donut hole, quarter by quarter. When they do, they will receive a check in the mail automatically for $250 in the following quarter.
Add it up, and that is $50 million of added disposable income for seniors in our state, money that will be spent in our local economies. That helps to keep jobs in this great recession. Health care reform will also shrink that donut hole down to nothing over the next 10 years, so seniors won’t have this cost hanging over their heads as they deal with the aches and pains and illnesses of being old.
When he was 12 years old, my son was diagnosed with a particularly unpleasant disease, a chronic lifelong condition requiring several expensive surgeries. Our health care provider — Group Health — provided and continues to provide this treatment. We always knew that if we lost our employer coverage, we might not be able to purchase coverage for him. Now that’s not a worry, children can’t be excluded from coverage because of pre-existing conditions. And with health care reform, we can keep our son on our coverage until age 26, which is a good thing given today’s job market.
All of us know some family member or friend or neighbor who have some underlying “pre-existing” condition and fear losing their health coverage. With health care reform, that fear is banished, for good.
The package that Congress passed and the president signed last week has a lot more details and benefits. It raises new issues and new questions. It is a start, not a conclusion. It makes some important, fundamental and humane changes in how we provide health coverage. It shows that public policy debate in a democracy is not necessarily pretty, but we can get the job done.
My son, and the business owners across the street, and my colleague’s mother can only appreciate that.
John Burbank is executive director of the Economic Opportunity Institute (www.eoionline.org). His e-mail address is email@example.com.