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Study: Kerry Might Cut Health Revenue By $78 Billion

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NU Online News Service, Sept. 21, 2004, 5:01 p.m. EDT

John Kerry’s health insurance reform proposals might cut private health insurance industry premium revenue by about $78 billion per year.[@@]

Researchers at The Lewin Group, Falls Church, Va., have compared health coverage reform proposals presented by President Bush and Kerry, his Democratic challenger.

The Bush administration reforms would depend mainly on tax incentives, and they probably would insure only 8.2 million additional people at a total cost of $23 billion per year and an additional net state and federal government expenditure of about $2,500 per person per year, Lewin analysts estimate.

The Kerry reforms call for expansion of government health coverage programs and a new catastrophic health reinsurance program. The Kerry proposals could insure about 25 million additional people, at a total net cost of about $125 billion per year to the state and federal governments. Because many of the people that the Kerry reforms would insure would have serious health problems, his reforms would cost the state and federal government programs about $3,600 per newly insured American per year, according to the Lewin estimates.

Lewin researchers also predict the program would cost private insurers a total of $774 billion over 10 years, or about $78 billion per year. Health insurers now collect about $600 billion in premium premium revenue per year.

Supporters of the Kerry proposal note that, although the program would cut private health insurance company revenue, it should reduce health insurance company claims costs by protecting them from some of the cost of insuring members who generate high claims costs.