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Kerry Proposes Federal Health Reinsurance Plan, Bush Campaign Criticizes

Sen. John F. Kerry (D-Massachusetts), the presumptive Democratic presidential nominee, has proposed that the federal government reimburse employers 75 percent of medical bills over $50,000...
June 8, 2004

Sen. John F. Kerry (D-Massachusetts), the presumptive Democratic presidential nominee, has proposed that the federal government reimburse employers 75 percent of medical bills over $50,000 that a worker runs up in a year. The reimbursement would, in effect, make the government a secondary insurer and ease costs for employers, workers and private insurers. In exchange for the benefit, Kerry would require employers to offer insurance to every worker and to provide health programs that detect and manage chronic illnesses. Presidents Dwight D. Eisenhower and Richard M. Nixon considered reinsurance pools for the most extreme medical cases.

Doug Badger, the senior health policy aide in the White House, told the Washington Post Kerry's approach would create "perverse incentives on effective disease management" because once the government began covering 75 percent of costs, there would be no financial reason to manage care or costs. The Bush Administration supports Association Health Plans (AHPs), under which small businesses would be able to pool together on a national basis through trade associations and either purchase their health insurance from a provider, or self insure.