Times Staff Writers

In a sign of how the political climate is shifting, powerful business interests that once teamed up to defeat Democratic healthcare plans are joining with labor unions and other unlikely allies to advocate extending medical insurance to millions of Americans.

Among the champions of change is the trade group representing the nation’s leading health insurance firms. That industry developed the “Harry and Louise” television ad campaign, which helped turn public opinion against the universal healthcare plan proposed by President Clinton and then-First Lady Hillary Rodham Clinton in 1994.

So devastating was the defeat that Washington politicians have hesitated to offer comprehensive proposals for change since then. Although Democrats talked of healthcare costs in the 2006 campaign, they have offered only modest proposals despite winning control of both chambers of Congress. Republican governors have offered some of the most ambitious plans recently, but GOP leadership in Washington has been muted.

Now, nongovernmental coalitions of seemingly strange bedfellows are stepping into the vacuum.

Today, the president of the Service Employees International Union will stand with the director of the Business Roundtable, which represents the nation’s leading corporations, to announce one campaign to overhaul healthcare.


On Thursday, private health insurance companies will join with doctors’ organizations and health-activist groups on the left to announce a plan for universal coverage.

“This week marks a kind of tipping point,” said Karen Ignagni, who represents the health insurance industry in Washington. Members of the trade group she now leads -- America’s Health Insurance Plans -- produced the Harry and Louise commercials, in which a middle-aged couple expressed alarm about the prospect of government meddling in their personal decisions about healthcare.

“The health insurance problem has been with us for decades,” Ignagni said. “With all these different efforts, you are seeing a consensus emerge that the time for action is now.”

Major questions remain about how a healthcare overhaul program would work -- including how it would be financed and who would participate. But broad agreement on the need for action is important, because the groups involved might have the political clout and lobbying muscle to push a plan through Congress.

The two plans being announced this week -- the details of which were not available -- come in the wake of ambitious blueprints for universal health coverage put forward by two prominent Republicans: in California by Gov. Arnold Schwarzenegger and in Massachusetts under Gov. Mitt Romney, who has since left office and is a 2008 presidential candidate

The Massachusetts plan -- the only comprehensive state proposal that has been enacted -- relies primarily on a requirement that individuals get health insurance. The state redirected funding that had been used to cover hospital care for the uninsured to subsidize health insurance premiums. The plan also levies a token fee on employers that do not provide coverage.

California’s plan would rely on a combination of requirements for individuals and new fees -- essentially taxes -- on businesses and healthcare providers.

Governors from a dozen other states are considering similar proposals.

Now, Democratic constituent groups, including labor and seniors’ organizations, are joining with big business to demand a substantive response to the nation’s healthcare problem, which has left 46 million people uninsured and has undermined American corporations’ ability to compete internationally.

“You take these two events, and you take what’s happening in the states, and what you are seeing is a real surge of interest in the issue of health reform, and the feeling that enough is enough about saying that the sky is falling: Let’s start to do something to put some answers out there,” said John Rother, director of policy and strategy for AARP, the seniors’ lobby. AARP is part of both nongovernmental coalitions.

The proposals may embolden Democrats, but party leaders note caution within their ranks. “I think the Democrats are concerned lest they seem too radical,” said Rep. Pete Stark of Fremont, chairman of the House health subcommittee. “We’ve got to win again in 2008, and I don’t think we want to come out and talk about universal coverage or anything that sounds like socialized medicine.” Stark is author of a plan that would use Medicare as a model to cover the uninsured.

Andrew Stern, the service employees union leader, has met in recent months with corporate chiefs around the country, urging a joint effort on a comprehensive overhaul.

His goal is to force action in Washington.

Stern said the traditional job-based medical insurance system “simply isn’t working.”

The broader coalition of insurance companies, doctors and activists on Thursday will present a detailed proposal to expand healthcare coverage to as many Americans as possible -- starting with children. Coalition members range from generally conservative groups such as the U.S. Chamber of Commerce to Families USA, a liberal advocacy group that was one of the principal champions of the Clinton healthcare proposal.

After the collapse of the Clinton plan, healthcare moved off center stage in Washington. President Bush has avoided sweeping proposals, focusing instead on tax credits to make insurance more affordable for individuals and small businesses.

Bush has been a strong advocate of health savings accounts, in which people pay out-of-pocket, usually routine medical bills from a tax-sheltered savings account while carrying lower-cost catastrophic insurance for major expenses.

Many businesses have started offering these accounts to employees, but it’s not clear whether large numbers of previously uninsured people are signing up.

In the meantime, employer-sponsored coverage has continued to erode. The share of workers covered through their jobs fell from 81% in 2001 to 77% in 2005. Many small and midsize employers no longer offer coverage, and some new businesses deem their employees self-employed contractors responsible for their own benefits.

Government health programs have expanded, but not enough to take up the slack. About 16% of the population is uninsured. Healthcare spending is rising faster than inflation, although the rate of increase has eased in the last few years.

Congressional Democrats, traditionally the leading advocates of expanded coverage, largely have been left on the sidelines in the latest maneuvering. Although many stalwarts, including Sen. Edward M. Kennedy (D-Mass.) and Rep. John D. Dingell (D-Mich.), remain committed to covering all Americans, the party lacks a unified position.

“What we are building up to is a year, 2007, in which a lot of people are willing to discuss the benefits and costs of universal coverage, but I don’t think we’re going to make legislative headway,” Stark said.

One Democratic senator, Ron Wyden of Oregon, is expected to introduce a healthcare bill this week. His proposal -- which was unveiled in December and combines Republican and Democratic ideas -- would mandate that individuals get their own coverage but require most employers to contribute to the cost.