Health Care Firms Boost Political Giving

Managed health care companies are pouring money into key congressional campaigns around the country in hopes of helping elect a Congress that will kill new efforts to slap stricter regulations on them.

The industry, which consists mostly of health insurers and health maintenance organizations, has nearly doubled the amount of money it gave candidates and party organizations during a comparable period before the last midterm elections in 1994, when pressures for regulation were not so great. Contributions now total $2.1 million, up from $1.2 million in 1994, according to data compiled from federal records by The Times and the nonpartisan Center for Responsive Politics.

The increase is part of a larger surge in business contributions, which have grown by about 50% from 1994 levels. Business interests--both corporate political action committees and corporate officials--have given $460 million so far this year, and Republican candidates have received almost $3 for every $2 given to Democrats.

But the managed care giving is particularly striking. Until managed care regulation became a hot political issue this year, the industry had not been a big financial player politically.

Opinion polls show widespread public concerns about the quality of health care provided by managed care companies, which seek to limit access to expensive medical tests and treatments in the interest of restraining health care costs. President Clinton is expected to put a “patients’ bill of rights,” which would give doctors and their patients more control over medical decisions, high on his legislative agenda for the coming congressional session, and lawmakers of both parties have promised to do the same.

Industry Turns to GOP for Help

About a year ago, when managed care was under siege from a bipartisan majority in the House that wanted sweeping new regulations, the industry chose Republicans as most likely to help. “They were market-oriented. They knew us. We thought they would be there for us,” explained one managed care lobbyist.

Instead, the GOP leadership made it clear that, while it was willing to help, the industry had better pony up bigger campaign contributions.

In a memorandum to her supervisor, a managed care lobbyist wrote that the staff of Senate Majority Leader Trent Lott (R-Miss.) told her: “Get off your butts. Get off your wallets.”

The industry got religion fast. For the first time, it aggressively linked its lobbying agenda in Congress with its political giving, 72% of which has gone to Republicans this year.

Cementing its relations with the Republican congressional leadership was an important achievement for an industry whose loyalties until recently had been split. A number of health plans backed Clinton’s 1994 proposal to overhaul the health care system--anathema to most Republicans.

“There’s a growing recognition that we have to be involved, not just in lobbying and educating members of Congress, but in the political scene in Washington,” said Sharon Cohen, senior vice president for federal affairs at the Health Insurance Assn. of America.

Moreover, the industry built powerful coalitions with the business community, which shares its goal of restraining health costs. It leveraged its campaign contributions by teaming up with groups that represent employers.

The special-interest giving related to managed care regulation has not been entirely one-sided. Doctors, who have contributed $1.6 million, hope to ease managed care firms’ grip on their practice of medicine.

Doctors Also Give to Sway Medicare Policy

Doctors also donate to members of Congress who support higher Medicare payment rates--even though many of these are the same lawmakers who oppose managed care regulation.

A leading contributor on managed care’s side is Blue Cross/Blue Shield, whose organizations nationwide donated more than $1 million, according to a report by the Center for Responsive Politics.

Brenda Becker, the Blue Cross/Blue Shield Assn.’s chief fund-raiser, co-chaired this year’s GOP House-Senate dinner--the party’s largest annual fund-raising event--and helped to collect $11 million in a single evening. “We are giving more to Republicans because they’ve been carrying our water on a lot of issues and they are also in the majority,” Becker said.

To bolster its clout, several of the leading managed care organizations, including the American Assn. of Health Plans, Aetna U.S. Healthcare and Cigna, formed the Health Benefits Coalition, which also included such high-powered business groups as the Business Roundtable, the Chamber of Commerce and the National Restaurant Assn.

They paid for radio and television ads throughout the year to defeat proposals to rein in the industry and to promote lawmakers who opposed Democratic patient protection proposals. One beneficiary was Rep. Anne M. Northup (R-Ky.), a freshman who made her name by vigorously defending the health insurance industry.

By the end of June--a month before the critical House vote on how much to regulate managed care--she had raised about 10% of her more than $500,000 war chest from managed health care plans and business groups that worked closely with them to block the patients’ bill of rights. By now, she has raked in thousands more.

That helped Northup buy extensive television advertisements starting in early September. Her opponent, Chris Gorman, could not raise even a dollar from the health insurance industry and little from employer groups and his first television ads aired just two weeks before the election.

The coalition of managed care and business also produced its own issue ads to promote one candidate or blast another in particularly tight congressional races. The costs do not count as campaign contributions because the ads are, at least in principle, orchestrated independently of the candidate’s own campaign.

“We don’t coordinate our giving to candidates,” said a lobbyist in the health benefits coalition, “but when we’re on a conference call or at meetings and somebody says so-and-so is in trouble, we all know what to do.” For Sen. Lauch Faircloth (R-N.C.), who faces a tough challenge from Democrat John Edwards, the American Assn. of Health Plans ran television ads warning that trial lawyers would win and patients would lose if Congress passed a law to allow patients to recover substantial damages from their health plans.

Edwards, himself a trial lawyer, has refused to take money from any PAC, including those of the managed care industry.