2 giant health insurers accused of illegal steps to thwart change

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The nation’s two largest health insurers have been pressuring employees to lobby against healthcare reform in Congress in violation of a California law against coerced political activity, a consumer group alleged Wednesday.

Consumer Watchdog in Santa Monica has asked California Atty. Gen. Jerry Brown to investigate its claim that UnitedHealth Group and WellPoint Inc. pushed workers to write their elected officials, attend town hall meetings and enlist family and friends to ensure an overhaul that matches their interests.

Christine Gasparac, a spokeswoman in Brown’s office, said the call for an investigation was being reviewed.


In a website message to the company’s 75,000 employees, UnitedHealth’s executive vice president and chief of medical affairs, Reed Tuckson, said he had “strong concerns” with some of the proposals and called for a bipartisan plan -- shorthand for heeding Republican opposition to any government-run option. He urged workers to contact an “advocacy specialist” with the company’s lobbying group to “educate and assist” them in getting involved, including during working hours.

WellPoint, whose Anthem Blue Cross unit is the largest for-profit insurer in California and employs 8,000, took a more overtly negative tack.

“Regrettably, the congressional legislation, as currently passed by four of the five key committees in Congress, does not meet our definition of responsible and sustainable reform,” Anthem said in a company e-mail last week. The proposals would hurt the company by “causing tens of millions of Americans to lose their private coverage and end up in a government-run plan.”

The appeals amount to illegal coercion under California law, Consumer Watchdog research director Judy Dugan said. “While coercive communications with employees may be legal, if abhorrent, in most states, California’s labor code appears to directly prohibit them,” said Dugan, citing sections forbidding employers from “tending to control or direct” or “coercing or influencing” employees’ political activities or affiliations.

The insurers denied their suggestions were inappropriate or aimed at defeating reform.

“Assertions that UnitedHealth Group has encouraged employees to attend anti-reform rallies are completely false and untrue,” said Cheryl Randolph, spokeswoman for the Minnesota-based insurer.

The company provided employees with details of “the constructive proposals we have made publicly to help reduce costs and unnecessary administrative spending in order to expand access to care,” Randolph said, adding that involvement was voluntary.


“WellPoint has not been contacted by the California attorney general and has not seen any complaint; therefore, we cannot respond to any questions at this time,” said spokeswoman Cheryl Leamon of the Indianapolis-based insurer. “We believe it is important and permissible to provide up-to-date information about health reform to our associates.”

One legal expert said proving a violation of the law might not be easy.

“I think it’s tacky, in the least, and it risks creating the kind of bad publicity that Consumer Watchdog is trying to bring to it,” Henry T. Greely, a professor at Stanford Law School, said of the insurers’ alleged efforts to enlist employees in the debate. “Certainly, anything heavy-handed would be grossly inappropriate. But it may be difficult to draw the line between informing people and improperly coercing them.”

Michael Waterstone, a Loyola Law School professor, said the California statute protecting employees from undue influence in political matters is unique to the state and has been used successfully to sue violators in the past.

The UnitedHealth letter went out to employees from the insurer’s lobbying group, United for Health Reform, which Dugan said was trying to rally employees to protect their leading stake in the health insurance industry.

“They want to be absolutely sure that there is no public insurance option that will compete with them,” Dugan said.




Claims denied

California HMOs reject 1 in 5 medical claims, an analysis of company data by the California Nurses Assn. finds.