Lobbies backing health reforms

Insurers change their tune from 1993-94 debate

A youtube.com video titled ''Harry and Louise Return'' backs government intervention into healthcare reform.

WASHINGTON - Powerful special interest groups that helped torpedo healthcare reform 16 years ago are now advocating significant changes in the nation's health insurance and delivery system. They are participating in regular discussions about how to expand health coverage and lower costs, key commitments that President-elect Barack Obama made in his campaign.

Significant differences over policy remain unresolved, and even the most optimistic proponents of reform think passing major legislation next year would be difficult. But two key factions, the business lobby and the health insurance industry, are talking seriously about substantial changes that would ideally help cover the nation's 47 million uninsured, improve the quality of care, and tame the growth of healthcare spending.

Today, the nation's largest health insurance lobbying group will present its own proposal for a version of universal health insurance. The group, America's Health Insurance Plans, has put up a website featuring man-on-the-street video interviews of people complaining about the lack of affordable healthcare: "I'm disgusted, I'm frustrated, I don't know what to do about it," a blonde woman with glasses says in one of the interviews. "It's time for the gov ernment to step in."

Leading business lobbyists have also joined in regular negotiations with insurers, healthcare providers, unions and other advocacy groups on what reforms they would support - not just what they would oppose - and they are trying to reach consensus on difficult issues. They have also underwritten television ad campaigns pressing for reform, in cooperation with such unlikely partners as AARP, which represents people over 50, and the Service Employees International Union.

"What's striking this time is the extent to which they're engaging in a constructive way, at least so far, and I think that's very promising," said John Rother, director of legislation and public policy for AARP, which backed President Clinton's failed health reform plan and is again a proponent of reform.

The mood contrasts markedly with the one that prevailed in 1993 and 1994, when the insurance industry sponsored devastatingly effective ads featuring a middle-class couple named Harry and Louise fretting about how Clinton's plan would limit their health choices - "They choose," Harry said. "We lose," Louise agreed - and business lobbies funded an unprecedented campaign against the Clinton plan.

Disagreements persist about how to cover the uninsured, how to control the growing cost of healthcare and how the insurance market should be regulated. But veterans of the Clinton-era health reform efforts say they are nevertheless encouraged by the posture the business and insurer lobbies have struck.

Many who participated in or observed the Clinton health reform efforts say business groups are more comfortable with the process this time - the Clinton reform plan happened through an unusual and secretive process - but next year's legislation appears to be taking shape in Congress, where lobbying groups are comfortable operating.

Chris Jennings, a healthcare lobbyist and former Clinton aide, said that business groups and insurers have more urgent reasons for getting involved this time.

"In stark contrast to '93-'94, their second-best option is no longer to do nothing," Jennings said. "They recognize that a failure to act is an explicit policy choice that has severe and negative consequences to them. . . . This isn't just about altruism."

Business organizations like the National Federation of Independent Business, a small business advocacy organization whose grassroots campaign against the Clinton plan bombarded Capitol Hill with letters and phone calls, say their members can no longer tolerate the rising cost of premiums, which is forcing many small businesses either to stop offering coverage or require employees to pay more for it.

"Our members have continued to say this is their number one issue for 25 years, it has become more of a crisis than just one of three problems that they have," said Amanda Austin, senior manager of legislative affairs for the business federation. "We basically said, 'We have to be for things, and here's what we're for.' . . . We're just doing what our members want us to do, which is get something."

The insurance industry, meanwhile, could gain or lose depending on which reforms are adopted: Offering tax credits or subsidies to help pay for private coverage for the uninsured could bring insurers millions of new customers; but if a reform law also lets people choose a public Medicare-style plan, private insurers could lose business.

Karen Ignagni, the president of AHIP, which represents insurers covering some 200 million Americans, said her organization began working on a series of reform strategies two full years ago - long before anyone knew who would be president or what the state of the economy would be now - out of a sense of responsibility and pragmatism.

"Strategically, industries have choices if they're at the epicenter of the discussion about a certain part of the economy," she said. "They can sit and wait for others to develop proposals or take the bull by the horns and look at what are the issues that are troubling the country, what are the issues that need to be resolved to help improve the productivity of the country. . . . It's not an altruistic strategy, it's a realistic leadership strategy."

Last month, AHIP announced it would support new regulations prohibiting insurance companies from denying coverage to people with preexisting conditions as long as individuals were required to buy insurance.

The parties still differ on many of the basic elements of any overhaul. Unions and large businesses, for example, oppose changes to the tax exclusion for employer-sponsored coverage - the provision that lets people get health insurance through their employers tax-free - because they fear disrupting the existing system and don't want employees to lose tax benefits. But trimming the tax exclusion for those with higher salaries or more generous benefits could help finance reform for all, specialists say.

AHIP believes that if insurers are required to accept everyone who applies, then individuals should be required to buy insurance. Obama has opposed requiring individuals to buy insurance.

Insurers are also concerned about creation of a public insurance option, something Obama and Senate Finance Committee Chairman Max Baucus have proposed.

Doubtful that the healthcare industry will sacrifice profits for a more efficient and inclusive system, Health Care for America Now, a coalition of mostly left-leaning groups - including MoveOn.org, the massive liberal grassroots organization - is preparing for a multimillion dollar public relations campaign to push through health reform.

"We bring a lot of skepticism to some of the posture that the insurance industry and the small-business community and the drug companies have taken in terms of their professed support for reform," said Richard Kirsch, the national director of the group, which issued a statement challenging AHIP's new proposal yesterday, even before today's announcement.

But Ron Pollack, president of Families USA, a left-leaning healthcare consumer advocacy group, said he believes real progress is quietly being made. He helped organize a 'strange bedfellows' group of 18 organizations - including the Federation of American Hospitals, AHIP and the US Chamber of Commerce - that are meeting regularly with a professional mediator in hopes of reaching common ground on substantive issues.

"If the 'strange bedfellows' participants reach agreement and find common ground, this clearly would be a game-changer," Pollack said. "It would make sure that the contentious atmosphere that pervaded every health reform debate in the past would become a much more cooperative exercise."