Health plans embrace reform in order to fend off the worst.

You may not see a “Harry and Louise” ad that slams efforts to reform U.S. healthcare, but don’t think interested parties aren’t hard at work to sway legislators as they contemplate sweeping changes this summer.

UnitedHealth Group Inc., the nation’s largest managed care company, spent $1.5 million to lobby the federal government in the first quarter, according to a recent disclosure form, the Associated Press reported. Hartford, Conn.-based Aetna Inc. spent $809,793 on lobbying in the first quarter. And Philadelphia-based Cigna Corp. spent $450,000, according to the Boston Globe.

Insurers are right to worry. President Barack Obama, as a young state senator, once told union members he favored single-payer universal healthcare. That would mean the end of commercial health insurance. Though now, Obama says, “We don’t want a huge disruption as we go into healthcare reform where suddenly we’re trying to completely reinvent one-sixth of the economy,” he has proposed a Medicare-like public insurer that would compete with private insurers to cover currently uninsured Americans, GateHouse News Service reported.

Insurers Take a Fresh Tack

The insurance industry, represented by America’s Health Insurance Plans, is taking a different tack in 2009 than in the mid-1990s. Led by president and CEO Karen Ignagni, a Democrat and one-time union official, insurers are taking a lead role in the debate over healthcare reform. In December, before Obama took office, AHIP proposed its own version of reform that would keep private insurers alive and well. That plan would:

            • Set up a public-private advisory group to recommend cost-cutting measures to Congress;

            • Create portable health plans that wouldn’t be subject to varying state laws;

            • Give tax credits to people who spend a large percentage of their income on out-of-pocket health care expenses;

            • Guarantee coverage for people with pre-existing medical conditions; and

            • Extend Medicaid coverage to all uninsured Americans who live in poverty.

Compare that to 1994, when the health-insurance lobby paid for an ad campaign that featured a couple at their kitchen table contemplating a health care system run by government bureaucrats and lamenting, “They choose, we lose.” The campaign devastated the Clinton administration’s effort to reform healthcare.

Now, spending on pro-reform ads is running 8-to-1 ahead of opposition messages, the Atlanta Journal-Constitution reported, and so far the industry has sponsored no TV spots like the “Harry and Louise” ads.

Wall Street Rewards Efforts

The stock market appears to like the industry’s approach; health-insurance stocks soared above broader indexes earlier in early May. Aetna Inc. and Cigna Corp. led large private health insurers that saw their stocks climb. In contrast, the Standard and Poor’s 500 index fell nearly 2 percent over the same period, the Associated Press reported.

Analysts told AP that investors have hope that private insurers won’t have to compete against a government-run plan structured like Medicaid or Medicare.

Obama and many Democrats favor such a plan, which would compete with private insurers to enroll middle-class workers and their families. But a government-run plan has drawn Republican opposition, and insurers have said it would hurt them.

“At some point over the next month or two, it will become evident that a government run plan is not a likely outcome this year,” Oppenheimer analyst Carl McDonald told AP.