HMO/insurance money an issue for insurance pool?

The fate of the state’s Private Employer Health Care Purchasing Alliance (PEHCPA) now rests in the hands of Gov. Scott McCallum — and political forces are being brought to bear on his decision.
Rep. Gregg Underheim (R-Oshkosh) is circulating a letter to Wisconsin lawmakers asking them to pressure McCallum to veto the provisions in the state budget that would create a health-insurance purchasing pool for small employers in Wisconsin.
Underheim, is chair of the Assembly Committee on Health.
Wording in the letter is almost identical to information being circulated by Humana regional vice president Larry Rambo. Both Underheim and Rambo claim that the tightened rate band required by insurance pool would force small businesses to drop their insurance coverage. Small business associations have come out in favor of the provision.
Underheim has received more than $11,545 from donors in the insurance and health care institution categories, according to a public record database available at the Web site opensecrets.org. Health care institutions and insurance were the sixth-largest and seventh-largest industries respectively in terms of donations to Underheim.
Humana, a Milwaukee-based health maintenance organization (HMO) and the leading voice in the fight against Wisconsin’s insurance pool, has contributed to Underheim’s campaigns.
For instance, Rambo, who was previously with PrimeCare, and his wife contributed directly to Underheim in 1996, 1997 and 1998, part of more than $20,000 in political contributions the couple has made to state politicians since 1995. Other individuals listing Humana or its predecessor in the employer/interest category who have contributed to Underheim include Mike Madden and Theresa Ostert. Donations from Ostert and Madden were made between 1998 and 2000.
In addition to small individual donations made by individuals in the industry, HMO political action committees (PACs) and large donors (those giving more than $1,000) have given more than $200,000 to political candidates since 1993 — a period that encompasses three election cycles starting in 1994. Current members of the legislature have received $126,901 in those large donations. But PAC contributions of HMOs are dwarfed by those of the insurance industry — which have given more than $1.6 million to Wisconsin politicians since 1993 — including $788,591 to the current legislature.
Money goes both ways
However, determining the role of money in the motives of lawmakers is difficult, as many industries hedge their bets by making donations regardless of party line, ideology or issues.
For instance, according to the campaign finance database, the director of Humana’s Madison Service Center, Kathy Caywood, who listed Employer’s Health/Humana as her employer/interest group, has contributed to both Democratic and Republican interests. Caywood contributed to the Committee to Elect a Republican Senate in both 1998 and 1999, but in 1999 also contributed to the State Democratic Committee — part of $1,160 in political contributions she has made to state pols since 1998. And she has also contributed to individual Democrats, including Sen. Kim Plache, (D-Racine), who serves on the powerful Joint Finance Committee and the Committee on Finance — and Senate Minority Leader Chuck Chvala (D-Madison).
Rambo has also contributed to Democrats, including Chvala and Plache, both in 1994. Rambo seems to prefer giving to Democrats involved with specific committees. In 1997, 1998 and 1999 Rambo contributed to Sen. Brian Burke (D-Milwaukee), co-chair on the Joint Committee on Finance and chair of the Committee on Finance. In 1996 and 1997, he also contributed to the coffers of Sen. Kevin Shibilski (D-Stevens Point), who serves with Plache and Burke on the Joint Finance Committee and the Finance Committee.
Health industry PACs and large contributors also seem to split the difference between Republicans and Democrats — while contributing a lot more to Republicans. Since 1993, large contributors and PACs have given $14,000 to Assembly Democrats on behalf of HMOs — while giving $55,129 to Assembly Republicans. In the Senate, HMO PACs and large contributors gave $30,397 to Democrats and $27,000 to Republicans.
Over the same time period, insurance-oriented PACs and large contributors gave $110,000 to assembly Democrats and $347,000 to their Republican counterparts. In the Senate, Democrats received $129,461 from insurance PACs — and Republicans $201,802.
Straddling the fence
Mike McCabe, executive director of the Wisconsin Democracy Campaign (WDC), says that strategy of straddling both sides of the fence is more and more common. WDC is a nonprofit that maintains databases of political contributions and advocates for campaign finance reform.
“What we have increasingly seen is that the most influential campaign contributors hedge their bets — they give to both sides,” McCabe said. “Fewer and fewer groups give only to one party. They are not interested in ideology or helping only one party. They spread the money around.”
McCabe said that trend is due in part to the current balance of power in the state.
“Contributors are increasingly conscious of the reality that we have a divided government,” McCabe said. “We have a Republican in the state house, Democrats control one house and Republicans control the other. If you want to get something through the legislative process, you have to talk to both sides.”
As far as McCabe is concerned, many individual donations are glorified PAC money as well — which accounts for the fact that many persons writing small checks on behalf of industry also exhibit the same strategic giving patterns as their employers.
“An individual contribution does come from their own funds, but they may be given a clear message from their employer that ‘getting something done in the legislature is important to our business and we want people associated with our business to give accordingly,'” McCabe said. “Sometimes they are urged pretty strongly to give.”
There are a few other clues that lead McCabe to believe that individual contributions are being coordinated by industry groups and employers.
“I don’t think it is any coincidence that when a business or industry has an interest in current legislation, this money shows up from individuals all on the same day — or within a couple of days,” McCabe said. “There is a lot of coordination going on. Obviously, they are not coming in randomly. This isn’t a situation where individuals are sitting at their kitchen table deciding to give money to a candidate. People are being given some pretty overt cues from the leadership of the organization about who to give to. The other piece of evidence that would point to a coordinated effort is that many of these individuals are not just giving to their own local representatives. They are giving to people who represent other areas. They target their money very astutely. They give to legislative leaders, key committee chairs and people in a position to move or block their agenda.”
McCabe’s described the type of legislator HMOs would want to contribute to.
“I think with people in the health industry, they would go for the legislative leaders — the speaker, the majority leader. And they would give to the chair and members of the Committee on Health and Finance Committees because those finance committee members have say over whether legislation affecting their industry will be successful,” MaCabe said.
Some legislators on Humana’s giving list told SBT they usually don’t know who their contributors are or what their interests in legislation might be.
“I don’t buy that for a minute,” McCabe said. “Politicians know who their donors are — particularly the large donors are very well-known. Large donors get cards — they get invited to events. Those big donors are very carefully cultivated by legislators.”
McCabe said that a study released in January of this year by WDC — Playing the Policy Market — showed that on average, campaign contributors are getting a 33,000 percent return on political contributions based on quantities given and the financial impact of decisions made in their favor.
All eyes on McCallum
As McCallum makes his decision about the health-care purchasing alliance, McCabe said all eyes will be on the governor.
“Political contribution data for first six months of 2001 will be available in early August,” McCabe said of figures reflecting who is contributing to candidates — including McCallum. “I think it is going to tell a lot about the people who were trying to influence him on decisions and veto considerations. It is going to reveal a lot.”
Aug. 17, 2001 Small Business Times, Milwaukee