Sept. 16 (Bloomberg) -- President George W. Bush will promote his plan for tax-free savings accounts for medical costs at a meeting with voters in Minnesota, seeking to erode Democratic challenger John Kerry's lead in polls on health issues.

Bush will talk to supporters in Blaine, Minnesota about ways he would cut medical costs, such as allowing businesses to pool together to negotiate lower insurance rates, said White House spokesman Trent Duffy. In Minnesota, fewer people are without medical coverage than in any other state. Bush is tied with Kerry among likely voters in the state, according to a Gallup poll conducted for Cable News Network and USA Today.

On health issues, Kerry has a 45 percent to 42 percent lead over Bush, according to a Washington Post-ABC News survey last week. Medical care ranked third after the economy and the Iraq war among the most important issues for voters in a Sept. 6-8 poll by CBS News.

The president needs to show voters he's not ignoring these domestic issues after stressing national security at the Republican National Convention two weeks ago, said Alec Vachon, president of Hamilton PPB, a Washington-based firm that counsels money managers on health policy.

``I would characterize this as a necessary thing to do,'' Vachon said. ``Bush has to be seen as proactive.''

Bush's election policy director, Tim Adams, said the campaign expects voters to respond to their message that Kerry's proposals to expand health care amount to big government interfering with consumer choices.

Bureaucrats

``People don't want bureaucrats in Washington making determinations about their health care,'' Adams said in an interview Sept. 13.

Kerry, 60, a four-term senator from Massachusetts, is trying to distinguish himself from Bush by promising to provide health care to all Americans, letting cheaper medicine be imported from Canada and allowing research using human embryonic stem cells.

Bush's plan, discussed at a health care event in Muskegon Michigan Monday, would allow companies to negotiate better insurance rates through industry associations and asked Congress to cap damage awards on medical malpractice cases. Bush said on Aug. 18 that importing cheaper prescription drugs from Canada and other countries ``makes sense'' only if it can be done safely.

Premiums Rise

Health-insurance premiums paid by U.S. employers rose 11.2 percent this year, five times as fast as wages, according to a study by the Menlo Park, Californian-based Henry J. Kaiser Family Foundation and Health Research and Educational Trust. Rates have soared 59 percent since Bush took office in 2001, researchers said Sept. 9.

``No candidate is proposing a frontal assault on the problem of rising health-care costs,'' Drew Altman, Kaiser's president, said last week.

The U.S. Census Bureau reported last month that the number of Americans without medical insurance rose by 1.4 million to a record 45 million last year. Almost 16 percent of the U.S. population have no medical coverage, according to the U.S. Census Bureau.

In addition to the speech on health care, Bush will attend two rallies in Minnesota. Bush and Kerry each garnered 45 percent support from likely voters in a three-way race in which independent candidate Ralph Nader got 5 percent, according to the Gallup poll a poll of 675 likely voters conducted Sept. 11-14. It had a margin of error of plus or minus 4 percentage points.

Minnesota Polls

Kerry led 50 percent to 41 percent in a separate poll by Minnesota's Star Tribune newspaper. The survey was conducted Sept. 7- 13, interviewing 1,035 likely voters. The poll has a margin of error of plus or minus 3 percentage points.

In Minnesota, 91.3 percent of residents have health insurance, the highest rate of coverage in the U.S. Bush's home state of Texas has the lowest rate of insured, at 75.4 percent, according U.S. Census data for 2003.

Minnesota, which former Vice President Al Gore carried by 58,607 votes in the 2000 election, holds 10 of the 270 electoral college votes needed to win the presidency. The state is among the 17 so-called battleground states that Bush won or lost by 7 percentage points or less in 2000.

Nationwide, the economy is the single biggest issue for voters, according to Washington Post/ABC News, USA Today/Cable News Network, Time and CBS News surveys released last week.

All four polls show Bush leading Kerry when voters are asked who they would vote for if the election were held now, with margins of 7 to 11 percentage points.

Catching Up

Kerry started catching up in polls this week, drawing 48 percent support to Bush's 47 percent in a Harris Interactive poll Sept. 9-13. A survey conducted for Investor's Business Daily Sept. 7- 12 showed Bush and Kerry tied with support from 46 percent of likely voters.

Bush led Kerry by 22 percentage points on who could better handle the war on terrorism and by 5 points on the economy in the Washington Post-ABC survey.

Bush risks more by ignoring domestic issues than by confronting them, said Rick Weissenstein, a health-care analyst at Schwab Washington Research Group.

``Republicans will feel good if they neutralize it,'' Weissenstein said. ``Or fight it to a draw.''

Bush's plan will cover an additional 6.7 million people who now lack health insurance at a cost of $129 billion over 10 years, according to an analysis by the American Enterprise Institute, which advocates limited government.

Cost

Kerry's plan will cover 27.3 million more people and cost $1.5 trillion, the group said. The Kerry campaign says its plan will cost $653 billion and cover an additional 26.7 million.

Bush says Kerry is attempting to create a big-government program that will burden taxpayers. Kerry says Bush has allowed 5.2 million Americans to lose their health insurance since he took office.

The Kerry campaign is responding with a new television advertisement today criticizing Bush's health care policies. The 30- second commercial says Bush oversaw the biggest Medicare premium increase in history and that health care costs and the number of uninsured have increased during his tenure.

Focusing on health care is a gamble for Bush since Kerry wants the public to turn its attention away from Bush's leadership in the war on terror, said Andrew Bressler, a health-policy analyst at Banc of America Securities. ``More talk about those issues brings it back to Kerry's strengths.''

Kerry would repeal tax cuts on families earning more than $200,000 a year to fund what he says is a plan to increase access to health care. He also said he would permit the government to directly negotiate with pharmaceutical makers for lower prices.

Frist

Such a plan has a ``huge economic cost'' and gives bureaucrats in Washington more control, Senate Republican leader Bill Frist told reporters on a conference call Monday arranged by the Bush campaign.

Frist, who became the first practicing physician in the Senate in almost 80 years when he was elected in 1994, also blamed Kerry and Edwards, a former trial attorney, for fighting Bush's plans to put caps on medical malpractice awards.

``They both have loudly and consistently opposed common-sense medical liability reforms,'' Frist said. Doctors are leaving 20 states considered ``in crisis'' because of rising premiums, he said.

Kerry calls for reviews to make sure that malpractice claims are ``reasonable,'' and for sanctions on frivolous lawsuits. Kerry argued last month that Edwards' legal background is an asset.

``Only John Edwards and John Kerry have the ability to put sensible malpractice reform in place that protects peoples' rights but also gets rid of the frivolous suits and reduces the cost,'' Kerry said at a campaign stop in Grand Rapids, Michigan, on Aug. 2. ``And that's exactly what we're going to do.''

Bush doesn't have much to gain in focusing on health care, said William Flanigan, a politics professor at the University of Minnesota.

``This is a tough place for him to win over new votes,'' he said. ``If you care about health care, you have decided what you like and dislike in the candidates. This choice has been relatively clear for a good long while.''

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net.

Last Updated: September 16, 2004 10:41 EDT