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Aetna, Humana, other insurers mull new group to influence November races

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Five of the nation’s largest health insurers are in serious discussions about creating a new nonprofit group and bankrolling it to the tune of about $20 million to influence tight congressional races and boost the image of their industry.

Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc. are weighing the new drive in part to shape the government regulations that will implement this year’s sweeping new health care legislation. Two lobbying sources familiar with talks underway by high-level insurance executives say that a decision to go forward with such an effort is likely to be made by at least four of the insurers—and possibly Cigna – in coming weeks.

The two sources tell the Center for Public Integrity they expect millions of dollars will be pumped into issue advertising in a number of races where candidates sympathetic to health industry concerns have a shot at winning.

“The objective is to make the House more accommodating to concerns that have been raised,” says one industry source. “They’re looking at toss-up candidates,” adding that the companies want to “focus resources to influence campaigns.”

Representatives of Aetna, Cigna, Humana, United HealthCare, and WellPoint could not be immediately reached for comment.

Focus on close contests

Overall, the insurers are expected to focus on swaying about two dozen close House contests, says one source.

The insurers’ goal will be to help elect members who can be allies in the all important regulatory writing process now underway to implement key parts of the health care legislation that was signed into law earlier this year.

The sources stress that insurers are particularly concerned at this stage about a provision in the new law that mandates they spend 80 cents of every premium dollar received on the welfare of patients. The high financial stakes mean insurers have been pushing hard with state regulators to allow for broader definitions of what constitutes patient welfare expenditures. This issue is “probably the most important one right now,” explains a source.

For instance, WellPoint wants to allow the inclusion of the costs incurred when it checks out the credentials of physicians in its networks. WellPoint runs Blue Cross plans in over a dozen states.

Insurers are concerned about the new regulations because the new law mandates consumer refunds if the companies’ administrative costs are excessive.

Health Care for America Now, a coalition of consumer groups that backs the new law, last week issued a study which indicated that if the six biggest for-profit insurers were required to meet the new legal standards in 2009, they would have been obligated to pay a total refund of $1.9 billion.

Although details of the insurers’ plans are still being fine tuned, they are said to be looking at the option of setting up a 501(c) (4) group -- which can accept unlimited funds from corporate donors -- to run the effort, which is expected to include sizable television issue advertising.

One source says that lawyers with Alston & Bird are providing advice about creating a 501(c) (4) group, which is legally allowed to engage in lobbying and election-related work, although the latter has to be less than a majority of its activities. Donors to this type of nonprofit don’t have to be publicly disclosed. Law firm representatives were not immediately available for comment.

Further, a source says that the insurers are eyeing the possibility of working with a think tank to provide research for the issue advocacy efforts. Detailed research could be important to the companies since the new drive will also try to improve the health insurance industry’s public image after the beating it took during a year-long fight over health care legislation.

During last year’s contentious health care debate in Congress, these same five insurers -- teamed up to channel between $10 million and $20 million to the U.S. Chamber of Commerce to underwrite a negative advertising drive to block the legislation.

In that earlier and abortive ad effort, the insurers funneled the funds through their industry trade group, America’s Health Insurance Plans, to keep a low profile and avoid publicity.