Fight Rages Over Health-Care Plan : Insurance: Opponents are trying to intimidate doctors into abandoning a proposed ballot initiative even before physicians begin collecting signatures.

The future of health insurance in California could be shaped by a behind-the-scenes struggle now being waged over what, if anything, regarding the issue will appear on the state ballot in 1992.

Business groups and the insurance industry are waging a fierce campaign against a doctor-sponsored health insurance measure that has yet to even be drafted in its final form.

In a new wrinkle for California’s ever-changing ballot initiative business, the opponents are seeking to intimidate the California Medical Assn. into abandoning the proposal before the physicians even begin collecting signatures to place it on the November, 1992, ballot.

“This is something of a new twist,” said T. Anthony Quinn, a spokesman for a coalition of insurance companies. “We are running essentially a full-scale opinion-molding campaign to convince them not to proceed with an initiative.”

So far, the strategy has produced mixed results.

As the opponents had hoped, the doctors backed away from an earlier proposal that went nowhere in the Legislature and attracted virtually no support outside of organized medicine. But in their quest for broader appeal, the physicians now are inching closer to a plan that could have more credibility with the voters and therefore be harder for the business groups to defeat.

Most intriguing are the doctors’ negotiations with Health Access, a broad-based coalition of consumer, labor and religious groups that has advocated a Canadian-style system of universal health care bitterly opposed by physicians. The two groups now report finding some middle ground--at least in principle--and are trying to draft a measure that could give those ideas the force of law.

Although neither group would make public the details of their emerging proposal, it is expected to include a requirement that businesses insure their workers or pay a tax to support a government-sponsored plan for people who cannot afford coverage.

More than 6 million Californians, including 4 million with jobs, have no health insurance at all. Attempts to solve the problem have produced a stalemate between the Democratic-controlled Legislature and two Republican governors.

Against this backdrop, the California Medical Assn. drafted a plan which it dubbed Affordable Basic Care, or ABC.

The plan would have required every employer with at least five workers to offer a basic package of health-care benefits, estimated to cost about $125 a month. Employers would pay 75% of the premiums, with employees picking up 25%. Subsidies for small firms and low-wage workers would be available.

Eventually, employees in the smallest businesses and those with no job at all would also have been covered. In addition, insurance companies would have been prohibited from basing their premiums on the medical history of those seeking coverage.

The proposal would have allocated $2 billion in new taxes and existing state funds to pay for the subsidies and to increase payments to doctors serving poor patients in the state Medi-Cal program.

The plan was introduced in the Legislature but went nowhere. As a potential initiative, it also failed to pick up any supporters outside of the medical community.

Business groups opposed it because they don’t want to be required to provide insurance. Insurance companies didn’t like the increased government regulation of their rating practices. These interests, along with the Health Access coalition, complained that the proposal was a self-serving money-grab by the doctors.

Despite these signs of opposition, a CMA spokesman said in early August that the initiative was a “ fait accompli ,” prompting opponents to redouble their efforts.

The insurance companies formed a campaign committee to oppose the initiative, calling its group the Consumer Health Insurance Coalition.

The coalition hired Goddard/Claussen Campaigns Inc., a consultant with national experience. Also on the team are a prominent Sacramento public relations firm and polling and legal experts. They produced a slick, campaign-style brochure attacking the proposal as “bad medicine” for California taxpayers and began waging a media campaign to keep the measure off the ballot.

Next, a coalition of employers, mainly from the service industries, organized its own campaign committee to fight the potential measure. This group, calling itself Health Coalition ‘92, hired the San Francisco-based public relations firm PBN to coordinate its effort.

While there is something of a rivalry between the two groups, they share the common goal of keeping the measure off the ballot.

The message to the doctors was simple: Go forward and you will face a well-funded, aggressive campaign that will portray physicians as a greedy special interest looking out for itself at everyone else’s expense.

“Successful ballot initiatives sponsored by single-interest organizations have not got a very long pedigree,” said Martyn Hopper, a lobbyist for the National Federation of Independent Businesses, which has joined both efforts. “The fact is, people will see through this initiative as being sponsored by the medical association and no one else.”

Faced with such criticism, including some from within its own ranks, the doctors have sought to broaden their measure and its appeal. In addition to Health Access, the physicians are talking with the California Assn. of Hospitals and Health Systems and the County Supervisors Assn. of California.

Danielle Walters, a spokeswoman for the medical association, downplayed the shift, insisting that the doctors never intended to go forward with the initiative as it was originally drafted.

“There was no change of gears,” Walters said. But she conceded that the doctors have had to take into account the political plans of their opponents, whose early campaign she described as a “preemptive strike.”

“It’s shortsighted to urge us to go back to the Legislature,” Walters said. “We’ve been there for the last four years putting forward our own proposals and supporting other proposals. We have been at the negotiating table and they (opponents) have flat-out opposed everything.”

An agreement with Health Access presumably would boost the doctors’ credibility with consumers, something they would sorely need in a big-money ballot fight. The talks so far have focused on converting the doctors’ plan into a “pay or play” proposal, under which businesses would have to pay a tax to support health care if they did not provide insurance to their workers.

“The proposal they had before was designed only to benefit doctors and did not deal with the problems that consumers had highest on their list, which are cost and access to care,” said Maryann O’Sullivan, executive director of Health Access. “They figured out that the public wasn’t going to buy that and they weren’t going to be able to build a coalition that went beyond doctors.”

But with time running short before an initiative effort must get under way, O’Sullivan said it remains to be seen whether the doctors will accept sufficient controls on their practices and charges to satisfy her organization and other potential allies.

“Our concern is going to be whether or not we can create some cost containment, whether or not they are willing to swallow the hard pill that is going to come with expanding access,” she said.