Will the upcoming presidential election have any effect on the rising cost of health care? Certainly, the two candidates have very different approaches. President George W. Bush supports tax breaks for individuals and small businesses to help fund purchases of private insurance and the use of association health plans. U.S. Sen. John Kerry also proposes tax credits, as well as an expansion of public coverage, and, in a provision that targets employers, he has called for a government risk pool that would reimburse employer health plans for 75% of catastrophic health-care costs.

Kerry's plan aims to lower the cost of group health premiums for employers by 10%. Employers that accept the reimbursement must provide health coverage for all their workers, pass on savings to workers and put in place disease management programs. "It makes premiums more predictable every year by taking the most expensive pieces out of the market," says Kenneth Thorpe, a professor at Emory University and a former deputy assistant secretary at the Department of Health and Human Services during the Clinton Administration. The risk pool also cuts administrative costs because insurers won't have to do as much work identifying and underwriting high risks, he says. Thorpe estimates that Kerry's plan could save a typical employer with 1,000 workers $275,000 a year on health care costs.

Bush's support for people who buy their own health insurance fits his theme of building an "ownership society." But Democrats argue that such tax breaks threaten group medical coverage by letting the healthiest workers exit the pool. "It makes much more sense to develop policies that build up the group insurance market and much less sense to promote policies that seek to fracture the market," says Michael Sparer, a professor at Columbia University.

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