Throughout the health care reform debate, we’ve seen opponents of reform come out in full force to misrepresent how this legislation will affect the American people. For months they have been targeting seniors---trying to deceive them into thinking that the President’s plan will reduce their guaranteed benefits. This is simply untrue. Under the new health reform law, no guaranteed Medicare benefits will be cut.  Here is the real truth:  The new health reform law will lower costs for seniors while improving the quality of care. That’s why seniors groups like AARP strongly support the new law. Let’s take a look at some of the key benefits for seniors:

• Under the new health reform law health care reform, seniors will get relief from exorbitant prescription drug costs that millions face when reach the gap in coverage known as the doughnut hole. This year, Medicare beneficiaries will get a $250 rebate if they hit this doughnut hole. And next year, they will receive a 50% discount on brand-name drugs in the donut hole.  By 2020, the prescription drug donut hole will be completely closed.  As AARP noted in its statement yesterday, “by completely closing the doughnut hole, people in Medicare Part D thankfully no longer have to make the tough decision to either pay bills or split pills.”
• Right now, seniors pay up to 20 percent of the cost of many of their preventive services. But next year, thanks to health reform, Medicare beneficiaries will receive free preventive care and annual wellness checkups at no cost.
• Reform will strengthen the financial health of Medicare through the elimination of waste and fraud, and by ending overpayments to private insurance companies. Through reform, unwarranted subsidies to private health plans will be reduced. Medicare’s guaranteed benefits will be protected.
• Seniors will see their care improve as we move to a system where providers are rewarded based on the quality of their care. With these changes, physicians and hospitals will be incentivized to reduce medical errors and coordinate care to keep people healthy.

So, while opponents of reform try to distort the facts and spread fear, seniors can rest assured that their coverage will be more comprehensive and more affordable as a result of health reform. 

Linda Douglass is with the White House Office of Health Reform 

Ed. Note: Read more about benefits for small businesses in our Health Reform section.

Few aspects of our health care system provided a greater impetus for reform than the degree to which the status quo created disincentives, barriers and obstacles for responsible behavior.  Take, for example, the case of small businesses that want to provide health care for their workers.

Recently, someone I know who runs a very small company that provides health care to its workers recounted to me his decision to hire a well-qualified job applicant who had undergone surgery for a serious condition. The moral choice was clear to him, but he told me that he knew from past experience that a single serious illness of an employee could drive premiums so high he might be forced to cut back health benefits to his 13 existing employees. These are the cruel choices that our current health care system imposes on those small business owners who want to do right by their workers.

Small business owners trying to do the right thing by providing health care to their workers face not a smooth road, but a difficult obstacle course.  Compared to large businesses that have bargaining power and the ability to pool risk, the owners of millions of very small businesses face premiums that are 18% higher and administrative costs three times greater.  Earlier this year, many small businesses reported rate increases ranging from 20% to 40%.  And that does not even capture the constant uncertainty: the knowledge that they are always just one single worker’s serious illness away from being forced to choose between the health security of their workers and the economic health of their business.

With the fundamental insurance reforms and new health exchanges that are at the heart of the recently signed health reform bill, any small businesses or non-profit with 100 employees or less will be able to enter the new health exchanges and, for the first time, benefit from the same negotiating muscle and choices that their larger competitors enjoy today.

But as President Obama will highlight today, the beginning of change will not have to wait for full implementation of all aspects of health reform.  Starting this year – indeed starting retroactively to January 1, 2010 – a new small business health care tax credit will be in effect that will provide a 35% tax credit on health premiums, with the credit rising to 50% in 2014. A similar tax credit will even be available to non-profits. This type of small business tax relief – long championed by Senator Durbin and many other members of Congress from both parties – is targeted to where the barriers and lack of coverage are the greatest. The $40 billion in tax credits over ten years will be aimed at many of the four million small businesses with under 25 employees (just 53 percent of firms this size provide coverage), and will be most generous for the firms with 3 to 9 workers, whose rate of offering health insurance has fallen from 58 percent in 2002 to just 46 percent in 2009.

A small business with 12 full-time employees that fully paid for health care could see tax relief of over $25,000 in 2010 – and over $40,000 in 2014. That’s not a lot for Wal-Mart perhaps, but it could be enough to help support a new hire, a critical new investment, or health coverage for part-time workers at hundreds of thousands of small businesses across the country.

Yet the benefits of such newly-passed provisions like the small business health care tax credit cannot be measured only in dollars and cents: their value also lies in the importance of ensuring that our health policies put wind at the back – not sand in the face – of those employers who want to do the responsible thing for their workers and their families.

Gene Sperling is Counselor to the Secretary of the Treasury