After fighting off sweeping health care legislation for almost two years, some insurance industry executives fear they may yet lose the war.
The premium caps, taxes and restrictions on excluding hospitals and doctors from their networks that they disliked so much in the major Democratic proposals seem dead.
But they might still end up with regulations they hate, in either a stripped-down bill in Congress next year or in stringent new state insurance laws.
And either way, there would not be universal coverage, which would have brought the insurance companies millions of new customers.
Having worked hard in the opposition effort that led Congress to go home without action on health care, insurers and managed health care companies are braced for a flood of new state regulations. They argue that these rules would raise costs and undermine their growing managed health care business.
The stakes are enormous for the insurance industry, which collected about $265 billion in premiums last year. After paying hospitals and doctors, the insurers had $50 billion left in profits and for marketing and administrative expenses, said Kenneth S. Abramowitz, a Wall Street health care analyst with Sanford C. Bernstein Co.
But the rules are changing rapidly and many of the players are concerned that they might lose all or part of their slice of the lucrative market.
"The battle will shift to the states and we will probably see a flood of state legislation over the next year or two," said George Halvorson, president of Health Partners, a big Minneapolis-based health maintenance organization.
Like most insurers, the HMOs opposed proposals for government caps on health care spending, and they objected to features that they said would undermine their ability to compete by devising new ways to finance and deliver care.
The big insurance companies bitterly opposed the Clinton administration's plan for regional purchasing alliances that could have taken over many of their functions.
All but a handful of states already prohibit steep increases in insurance premiums, after an employee or family member has an expensive illness, which make it difficult for a small business to stay insured.
At least 34 states require insurance companies to cover any small group that applies, and 17 states prohibit wide variations in premiums linked to age or health status.
While the insurance companies have endorsed many of these measures, they are fighting laws enacted in at least 25 states that they regard as obstacles to managed care.
To be sure, the industry is far from united. Five of the biggest insurance companies _ Prudential, Aetna, Cigna, Metropolitan Life and Travelers _ describe themselves as health care companies. They call their group the Alliance for Managed Competition.
Health maintenance organizations and other managed care networks typically limit their members' choices of doctors and hospitals to those that lower their fees and follow rules intended to reduce costs.
Self-insured companies take their chances on paying for any illnesses that may occur, while both HMOs and traditional insurance assume those financial risks.
The five, which have invested heavily in HMOs and other managed care networks, resigned last year from the Health Insurance Industry Association of America, the trade group for most insurance companies.
The big insurers saw themselves as managed care companies that had little in common with smaller companies that primarily sold traditional fees-for-service health coverage.
Independent HMOs like Kaiser Permanente and U.S. Healthcare have their own trade groups and agendas, which promote managed care and universal coverage. And the 69 state and regional Blue Cross and Blue Shield Associations also try to maintain a united front in Washington, although the associations' 69 members include nonprofit and for-profit companies, large and small, from both urban and rural states. …