On the afternoon of March 5, the White House East Room was packed with more than 100 top Senate and House lawmakers; senior presidential aides; trade association and business executives; leaders of labor, consumer, and activist organizations; and even a lobbyist or two. They were there at President Obama's invitation for a summit on the looming legislative debate over health care reform.

In the crowd were two key players from the business community, leaders of trade associations that, back in 1993, had a hand in sinking health care reform under President Clinton. Now the two groups were prepared to play a different game with a new president and an overwhelmingly Democratic Congress. The presence of their CEOs at the summit was sign enough that the times had changed.

"Karen Ignagni? Ignagni? There you are," Obama said, his eyes searching the room as he called on the woman who is president and CEO of an association whose companies provide health insurance to about 200 million Americans.

"Thank you, Mr. President," Ignagni responded. "On behalf of our entire membership... we understand we have to earn a seat at the table. We've already offered a comprehensive series of proposals. We want to work with you. We want to work with the members of Congress on a bipartisan basis. We hear from the American people what is not working. We take that very seriously. You have our commitment to play, to contribute, and to help pass health care reform this year."

"Good. Karen, that's good news. That's America's Health Insurance Plans," Obama responded, as the audience clapped.

"While I'm on it," the president continued, "why don't I call on Dan Danner, who is NFIB. Give us the business perspective."

"Thank you, Mr. President," said Donald (Dan) Danner, president and CEO of the National Federation of Independent Business, a group with a formidable grassroots army of 350,000 small-business owners. "We do think that small business has a key role in this debate. And for them, cost is still the top issue. We very much look forward to finding a solution together that works for America's job creators."

Given all the acrimony of the past, it was a remarkable moment (captured live on C-SPAN) that showed just how different the fate of Obama's health care agenda was likely to be from previous attempts by Democratic presidents. In the prior go-around, Ignagni's and Danner's groups, among others, were foursquare against reform. Their groups mounted an effective national lobbying and PR campaign. Insurers funded one campaign that became known by the names of its fictional couple, "Harry and Louise," who warned in a famous advertisement that Clinton's plan was a bad deal for America.

Still, for all of today's talk of inclusiveness and collaboration among politicians and interest groups, the day of legislative reckoning is coming. Up to now, the health care reform discussion has been about achieving broad goals, such as covering the nation's 45.7 million uninsured, improving the quality of care, and reducing costs.

The first Democratic bill was introduced in the Senate just this week. (Drafts and outlines of bills are already circulating in the House.) "We are at the end of the happy-talk stage," said Drew Altman, president and chief executive of the Kaiser Family Foundation. "Once legislation is on the table, then the interest groups will start acting like interest groups again."

The question for many in Washington is whether Ignagni, Danner, and the many other interested stakeholders that have so much to gain or lose will get what they want from the legislation. If they don't, will they remain a part of the process, or will they walk away and again try to bring down health care reform?

"This is the big game," said Sheryl Skolnick, senior vice president with the investment group CRT Capital Holdings. "If ever there was a Super Bowl moment in Washington, this is it."

Economics And Politics

How Ignagni and Danner guide their members in the coming weeks will have as much to do with politics as economics.

The health insurance industry is unpopular, a fact that is not lost on Democratic lawmakers. Polls show that Americans blame insurers more than any other part of the health care system for rising costs. CEOs of AHIP companies are now greeted by protesters, such as those who showed up outside the association's national policy forum in March at a downtown Washington hotel just days after Ignagni pledged to work with Obama and Congress. "AHIP, get off it! People over profit!" chanted the collection of protesters, which included Rep. Eric Massa, D-N.Y.

Many in the progressive community, such as Richard Kirsch, national campaign manager for Health Care for America Now, a coalition of more than 1,000 interest groups that includes labor unions and Moveon.org, call Ignagni and AHIP "the archenemy."

The health insurance market is also facing a major loss of customers. The combination of the recession, rising premiums, and the aging of the population means that insurance companies have no place to grow, Skolnick said. By 2011, as many as 70 million Baby Boomers will begin retiring and leave the private health care system for Medicare. "The health care plans are vulnerable, politically and economically," she said.

Small businesses, on the other hand, are popular. About half of Americans say they have a "great deal of confidence" in small-business leaders, according to a Harris Interactive 2008 poll. Tens of millions of Americans work for small businesses, which generate 60 to 80 percent of all new jobs, according to the Small Business Administration. "People identify strongly with the local small businesses they patronize every day," said Burdett Loomis, professor of politics at the University of Kansas.

Small-business owners also pay higher insurance premiums -- as much as 18 percent more -- than large companies pay, the Kaiser Family Foundation says. That means fewer and fewer small businesses can afford coverage. As of 2008, just 38 percent of small businesses provided health coverage to their employees, down from 67 percent in 1995, according to the National Small Business Association. The NFIB says that 55 percent of its members provide coverage to employees.

"It was the combination of politics and economics," Loomis said, "that drove the health insurers and small businesses to health reform."

The path to reform that the Democratic Party's leaders would take has been known since the fall of 2007, when its presidential candidates outlined their proposals. Hillary Rodham Clinton, John Edwards, and Barack Obama all proposed new regulations on health insurance companies, including requiring them to end the practice of barring coverage for pre-existing health conditions, poor health, and other factors that could increase insurers' costs. They also called for all individuals to buy health insurance, as a way to achieve universal coverage.

To pay for their plans, the Democrats called for an employer mandate, although Obama proposed exempting some small businesses. Edwards, Clinton, and Obama all proposed allowing individuals to choose from a menu of health insurance options that included a public plan, as a way to force down costs. In a June 2 letter to senators, Obama reiterated that Americans "should" have the option of choosing a public plan.

The public plan alarms AHIP and the NFIB. Insurance companies fear that a public plan would drive them out of business, as the government could undercut the private sector by offering lower premiums thanks to lower costs. Danner's members oppose a public plan because they see it as government interference in the private market. The employer mandate is problematic for the NIFB too, Danner said, because it would impose new costs on small companies and could cost jobs.

On the other hand, the Democratic candidates espoused some policies that the insurers and small businesses liked. AHIP's members support mandating that individuals buy health insurance, because that would give them access to millions of new customers. The NFIB's members support individual mandates because they see in them an opportunity for relief from the crushing costs of health care premiums. Both groups began strategizing several years ago on their approach for the next reform debate.

"The difference is that 15 years ago, our members felt that the status quo was better than what was being proposed," Danner said. "This time the status quo isn't acceptable."

Disarming

On May 5, two months after the White House summit, 15 business, nonprofit, and government leaders on health care sat at a long witness table before the Senate Finance Committee, one of two Senate panels taking the lead on a bill. (The other is the Senate Health, Education, Labor, and Pensions Committee.) Ignagni, who has been lobbying for health insurers for 15 years, was among those present. "We are ready to be accountable to new rules," she told the senators.

The slender and unassuming blonde with a friendly smile doesn't look the part of a tough K Street player who works for a multibillion-dollar industry. But she is among the most respected and effective lobbyists in Washington. She developed her reputation from working on all sides of the health care debate, and even on two sides of the ideological spectrum. Ignagni grew up in Providence, R.I., where her father was a firefighter and her mother worked for City Hall.

She came to Washington in the 1970s to be a health care analyst for the Social Security Administration and later joined the union-backed Committee for National Health Insurance. Ignagni went to Capitol Hill to work for then-Sen. Claiborne Pell, D-R.I., before leaving to take a job at the AFL-CIO. She stayed for 11 years and was the director of employee benefits.

In 1993, Ignagni was recruited to become president of the American Association of Health Plans, a group that had labor support and also represented health maintenance organizations. Ignagni used the political tools she had learned at the union and became a fierce advocate for her managed care companies. (Her group was not the one that funded the Harry and Louise ads, but most of those companies that did are now members of AHIP.) In 2003, the merger of Ignagni's group with the Health Insurance Association of America created AHIP, and she was hired as its CEO. Among the union tactics that Ignagni continues to deploy are grassroots and campaign-style rallies outside the Beltway, combined with deep research and direct lobbying on Capitol Hill. They have helped the group to beat back repeated efforts by Congress to impose new rules on the health insurance industry and to persuade Congress to keep money flowing to private health plans that serve Medicare patients.

"Karen has the unique combination of intellectual horsepower, an unbelievable work ethic, fierce determination, and charm," said Dan Leonard, president of the National Pharmaceutical Council, who worked closely with Ignagni at AHIP for more than six years.

She has an empathetic and unflappable demeanor that tends to disarm opponents, and she knows how to use the media and PR to help her cause. Ignagni appeared on The Oprah Winfrey Show with liberal documentary film producer Michael Moore, who is a fierce health insurance critic, and managed to elicit an "I agree with you" from him. She appeared on the Frontline episode "Sick Around America," talking about her problems with asthma that could disqualify her from getting private health insurance.

"Karen earned her pay for 10 years on that Frontline show," a senior Senate Democratic aide said. "It was compelling when she talked about getting asthma." Another Senate Democratic aide added: "I've been pleasantly surprised with AHIP. I think they have been a positive player."

"We are ready to be accountable to new rules."

-- Karen Ignagni, testifying to the Senate Finance Committee

That is music to AHIP members' ears, and it's why the member-company CEOs show full confidence in Ignagni. As far back as 2006, she was looking ahead to the aftermath of the next presidential election, and she began talking with her board about the approach her industry wanted to take in 2009, including embracing policy options that were going to mean smaller profit margins for member companies. "We had two options," Ignagni said in an interview. "We could come to the table with solutions. Or step back and do what was done in 1993 and 1994 and wait for others to identify solutions. The board decided to engage."

Those close to Ignagni also said she knew that if the Democrats expanded their margins on the Hill and won the White House, many of their policy proposals, including a public option, would get traction in Congress. Ignagni believed that insurance companies had to be for some dramatic changes if they were to have a shot at influencing the debate.

"The key to Karen's strength and success is that she began the process early enough so that everyone had time to consider alternatives and to dig deep, so that it was a policy-oriented process, not a last-minute, political process," said AHIP Chairman Jay Gellert, president and CEO of Health Net, a managed care company in Woodland Hills, Calif.

Adds David Abernethy, senior vice president at EmblemHealth, who also serves on AHIP's policy committee: "She has done a great job moving [AHIP's CEOs] to the point that might let their companies survive."

In December 2008, AHIP unveiled proposed regulations for the industry that many health care experts saw as big concessions. The insurance companies offered to stop denying coverage to people with pre-existing conditions. Ignagni later pledged to end the practice of charging different premiums based on a person's health status and gender. And in May, AHIP led a coalition of health care stakeholders that pledged to Obama that they would "do our part" to help the administration reach its goal of saving up to $2 trillion in health care costs over 10 years. In exchange for these shifts in business practices, the companies said that individuals should be mandated to buy health insurance.

As far as a public plan, Ignagni argues that it isn't necessary, because the insurance industry is agreeing to a new set of federal regulations that would achieve the same goals as a public plan. "People don't have to trust us," she said in the interview. "They shouldn't. But they should trust the government."

Ignagni got positive reactions, even from surprising quarters. "Her group was probably the deepest in the hole as an industry, and I would say they repositioned themselves incredibly successfully," said Andy Stern, president of the Service Employees International Union. (Stern was among the witnesses at the May 5 Senate hearing.) "Instead of getting run over by change, they became agents of change. It's brilliant."

Tensions

Unlike AHIP, Danner's group hasn't offered a raft of policy shifts to secure a seat at the table. And he's drawn an early and clear line marking where the NFIB stands on health reform: Members' No. 1 policy priority is to get reform that doesn't include a public option or an employer mandate. The NFIB doesn't want "anything that looks like it could be destructive to the current private marketplace in health care," Danner said in an interview.

Proposals requiring employers to offer coverage or pay into a system that helps workers buy their own insurance is a "lightning rod," Danner said, even if the proposals would exempt or subsidize small businesses. Why? Because, according to Danner, the government could swoop in and change that exemption at a later date. The employer mandate is the breaking point, Danner said. "If you mandate something [that small businesses] can't afford, then the result is fewer jobs. They will lay people off."

The NFIB, a Republican-leaning group that may seem out of sync with the Democratic majority in Washington, is still a force to be reckoned with because of its activist membership. (Witness the fact that the president called on Danner to speak at the White House summit in March.) Small-company owners live in every congressional district, and lawmakers are sensitive to their concerns. The NFIB also has a history of flexing its grassroots muscle.

The System, a book by journalists Haynes Johnson and David Broder on the fall of the Clinton health care plan, describes in detail how the NFIB, which also opposed employee mandates, mobilized its members to pressure Congress beginning in the spring of 1993. The group came out battling before any other major business interest and became a model for lobbying efforts by corporate interests in Washington.

"Fighting Clinton's health care plan made the NFIB," said a GOP lobbyist.

Danner, however, wasn't the one who initially led the NFIB to the negotiating table this year. That was done by CEO Todd Stottlemyer, before he resigned in January after three years on the job. Danner, the association's executive vice president, took over on February 1.

Speculation swirled that Stottlemyer was frustrated with philosophical differences within the NFIB about a legislative strategy on health care. He wanted to be more conciliatory and bipartisan, but others within the NFIB did not, several sources close to the NFIB said. Danner denied that speculation, as did Stottlemyer, who is now executive vice president of corporate services at Inova Health System in Northern Virginia.

Stottlemyer said he had the full support of the board to pursue a bipartisan strategy, and that personal reasons led to his departure. The NFIB job calls for extensive travel, and he wanted to spend more time with his two teenage sons. The Inova job, Stottlemyer said, was an "interesting opportunity" that allowed him to be home and still engage in the health care sector.

Before his departure, Stottlemyer was reaching out to groups across the political spectrum. The NFIB has been ideologically in line with Republicans, because its members oppose most government regulation and taxes, so it was shocking to those in the GOP community when one of the NFIB's allies became the SEIU, an archenemy of business.

The NFIB in 2007 joined the Divided We Fail coalition, an advertising and lobbying campaign to push the presidential candidates to make health care a top agenda item. Other members of the group were the Business Roundtable, AARP, and the SEIU.

"Do you know how much many businesses hate the SEIU?" a Republican lobbyist asked. "The NFIB is a really conservative place, so to see that was a really big deal."

Danner said that joining the coalition "showed how seriously" the NFIB's members need reform and that although the group's members don't all agree, "we accomplished the goal of showing that this is bigger than the normal inside-the-Beltway political fight." The NFIB also joined with the Kaiser Family Foundation and consumer activist group Families USA to sponsor health care forums with lawmakers. In a twist, they also joined forces again with Families USA and with three other groups to sponsor ads with the Harry and Louise actors arguing for action on health care. Further, the NFIB joined the Health Reform Dialogue last year with 19 other groups, including two labor unions, to recommend reforms. (The labor unions did not sign on to the recommendations that the groups made to Congress this March.)

The NFIB successfully worked with a bipartisan set of lawmakers to introduce a bill that would allow small businesses and individuals to band together in pools so they could negotiate better prices for insurance. It would also provide tax incentives to help small businesses offer insurance and the self-employed buy insurance. And it would prevent insurers from imposing large rate increases on a business because one of its employees had a serious illness. The NFIB is pushing hard to get those measures into the final reform bill that Congress is likely to act on this year.

Still, all of the bipartisanship has made some NFIB members uncomfortable, according to some on K Street. "There is concern the NFIB has given up its traditional independence on this issue and therefore may have given up its ability to be a critic," said John Motley III, a partner at Policy Solutions. (When Motley was a lobbyist at the NFIB, he led the group's grassroots efforts in 1993 and 1994 against the Clinton plan.) "You also could argue that it put them at the table. I'm not sure which is true."

For now, Danner is at the table. He is an experienced and widely respected hand in Washington's lobbying wars. He has called the NFIB home since 1993, when he joined the group to run its foundation. Danner has a low-key and friendly style, and many lawmakers and interest-group leaders know him.

"Dan is the right person for the job because of his legislative and lobbying experience," said W. Thomas Musser, the former chairman of the NFIB who owns an electronics firm in Kennett Square, Pa.

Danner grew up in southern Ohio, where his parents worked for a steel company. After studying electrical engineering in college, he became a state lobbyist for Armco Steel in Ohio and then was transferred to Washington in the late 1970s. He worked for the Reagan and George H.W. Bush administrations before moving to the NFIB in 1993. In 1995, he took over the NFIB's lobbying operations.

"Dan is very good" for the NFIB, said John Castellani, president of the Business Roundtable, "because he understands the small-business community and that gives him a lot of political leverage. Everyone loves small business, and no one wants to see pressure on them, because they are the engines of job growth."

Decisions, Decisions

Soon, Ignagni and Danner must decide whether to keep working with the president and Congress. The HELP Committee's Democrats unveiled their version of a bill this week that did not include a public insurance plan or an employer mandate, although they could be added later. Sen. Christopher Dodd, D-Conn., said that Democrats wanted to give Republicans a chance to offer their input on the bill before including those measures. The markup is scheduled to begin on June 16. Separately, Senate Finance Committee Democrats are expected to unveil their own bill next week.

In the House, key chairmen announced the outline of a health care bill that includes a public insurance option, as well as an individual and employer mandate. Small businesses would be exempt from the employer mandate. Three House committees are working together on the legislation. Speaker Nancy Pelosi of California has pledged to pass a bill on the House floor by July 31. An explosive lobbying battle may be in the offing, and all eyes will be on AHIP and the NFIB.

Ignagni's group will have a lot of weighing to do because the decision about how to proceed may not be easy or clear-cut. If Congress adopts a public option, it would not necessarily be a Medicare-type plan that Democrats have been discussing. For example, Sen. Charles Schumer, D-N.Y., has proposed creating an insurance plan that is initially funded with public dollars but is sustained through its own fees and subject to private-market rules.

Another option floated by some Democrats and Republicans is to create a public plan with a trigger, meaning it would be enacted only if insurance companies didn't live up to their promises. Sen. Kent Conrad, D-N.D., proposed yet another alternative, which was gaining traction this week, that would create a pooling system similar to a nonprofit co-op through which individuals could purchase insurance.

"It all depends on what the definition of the public plan is," said a health insurance company lobbyist when asked what might cause his industry to leave the table. "I don't think it's going to be that black or white, so we'll just have to see."

And the industry's desire for an individual mandate may prove to be too hot politically for lawmakers, said Aranthan (AJ) Jones II, a principal at the Podesta Group, who recently served as policy director for House Majority Whip James Clyburn, D-S.C. He thinks that a mandate could make the public balk and that it could play badly in moderate House districts.

"Forcing people to have health insurance and imposing a penalty if they don't?" Jones said. "I could imagine the '527' ad crafted to fight an individual mandate."

To lure the public to the idea, Congress could decide to phase in an individual mandate, although that approach would be financially problematic for the insurance industry. Without the individual mandate, the insurance industry will have a hard time meeting its pledges to guarantee coverage regardless of pre-existing conditions and to end premium pricing based on health status. "They have to have the individual mandate, because they can't share the risk without it," Skolnick said.

Ignagni declined to tell National Journal what her group would do in that situation, or what could cause AHIP to leave the table.

Danner's path is clearer. He is on record opposing an employer mandate, as are business groups such as the Business Roundtable. They argue that the economy is too weak to begin imposing new costs on businesses. Danner also opposes a public plan. But if the NFIB got all that it wants for small businesses in terms of tax incentives and the ability for companies to pool together and buy insurance, it's not clear whether the NFIB would launch an all-out attack.

"We hope it's not 1993 and 1994 again," Danner said. "Our members can't afford another 15 years" waiting for reform.

Plenty Of Weapons

Certainly Ignagni's and Danner's groups have the resources and tools for battle.

AHIP spent $7.54 million on lobbying in 2008, up from $6.9 million in 2007. In the first quarter of 2009, the group spent $2.03 million on lobbying versus $1.82 million during the same period last year, according to Senate records. In the 2008 election cycle, AHIP's political action committee doled out $322,500 in campaign contributions to federal candidates, 54 percent of which went to Democrats and 46 percent to Republicans. On its roster of six hired-gun lobbying firms are the Capitol Health Group; Davis & Harman; the Duberstein Group; HC Associates; Mehlman Vogel Castagnetti; and Stephanie Wenkert Kanwit.

Also at AHIP's disposal is a powerful grassroots network called the Coalition for Medicare Choices. It includes more than 810,000 seniors who could make calls to lawmakers if legislation develops that AHIP's companies consider detrimental to their business. AHIP has tapped the network in the past to generate thousands of calls to Congress about proposals to cut funding for the Medicare Advantage program, which offers managed care and other private insurance to Medicare beneficiaries.

Last summer, AHIP launched the Campaign for an American Solution, a countrywide listening tour of town hall meetings that Ignagni conducted, and an advertising and online campaign to solicit support from people who liked their health insurance, and to hear from those who were dissatisfied. Earlier this month, a Rasmussen poll reported that 70 percent of Americans who have health insurance rate their plan "good" or "excellent" and that only 25 percent of people support a plan that would force them to change their coverage.

"People are for health care reform right now because no one has put forward a plan that is scary to the American people," said the Kaiser Foundation's Altman. He said that there is "some softness in public opinion and potential to scare people. The fear is the cost, or that they may lose the choice of a doctor or hospital or be forced to change their insurance plan."

In the first quarter of this year, the NFIB spent $800,262 on lobbying, down from $1.04 million in the same period of 2008. For all of 2008, the NFIB spent $3.97 million on lobbying, up from $3.88 million in 2007. In the 2008 election cycle, it contributed $779,587 to federal candidates, of which 83 percent went to Republicans and 17 percent to Democrats.

The NFIB has 10 in-house lobbyists and one outside lobbying firm on tap, the bipartisan firm Ogilvy Government Relations.

Robert Blendon, a professor of health policy and political analysis at Harvard University's School of Public Health, said of the NFIB: "They have a campaign threat with great credibility. That is, they could say, 'If you do this, we will lay off people.' If they start saying [that] implementing a health plan will cost a lot of jobs, then people will stop and listen."

Randolph (Randy) Fenninger, a senior public policy adviser with Holland & Knight, thinks both groups get much of what they want, because moderate Democrats and most Republicans are receptive to AHIP's and the NFIB's arguments. Furthermore, President Obama has stated that he wants health care reform legislation to be bipartisan. To get a few Republicans on board, the health care package would have to include policies that both groups espouse.

"If you wind up with a health insurance bill that goes to the president over the vehement opposition of the major [health care] stakeholders, that isn't good," Fenninger said, adding that it will make implementation and enforcement more difficult.

On June 5, nine Republicans on the Senate Finance panel sent a letter to Obama expressing opposition to a public plan. One committee Republican, Olympia Snowe of Maine, did not sign the letter, which suggests that she is working with Democrats to find a compromise on the public plan option. Separately, Republicans have said that they also oppose an employer mandate.

"It's kind of a litmus-test sort of thing," Sen. Charles Grassley, R-Iowa, told National Journal's CongressDaily.

Push-Back From The Left

Republican and business group opposition will be up against a countering force from the progressive interest groups, which also have grassroots muscle and resources to push for a public plan and potentially an employer mandate. Kirsch's group, Health Care for America Now, in conjunction with 10 others groups pledged on June 1 to spend at least $82 million this year on advertising, phone banks, and direct mail.

The coalition -- which includes the AFL-CIO; the American Federation of State, County and Municipal Employees; Americans United for Change; Campaign for America's Future; the Campaign for Community Change; the Children's Defense Fund; MoveOn.org; Rock the Vote; the SEIU; and USAction -- is planning to bring thousands to Washington on June 25 to visit lawmakers on Capitol Hill and to make sure that "Obama's agenda isn't thwarted by the traditional lobbying culture" in Washington, said Howard Dean, former head of the Democratic National Committee.

Organizing for America, Obama's grassroots arm that began as a DNC project during the presidential campaign, has launched its drive for health care reform. It began contacting the 13 million people on its e-mail list to organize house meetings and town hall discussions and is planning a health care day of service on June 27. On May 28, Obama told its members, "If we don't get it done this year, we're not going to get it done."

The NFIB may also face a counterargument from within its own ranks. The Main Street Alliance, a set of 5,000 small-business owners, has been lobbying Congress with a different opinion. The alliance says that its small-business owners support a public option and are also willing to accept an employer mandate.

"Traditionally, Democrats haven't reached out to the small-business community; but if they do, they will find many of us are less orthodox" than the NFIB, said David White, who owns an auto repair shop in Bar Harbor, Maine. White had been a member of the NFIB for 10 years but left the group because "I felt my opinion wasn't reflected in their tactics."

Even if the legislation isn't to AHIP's or the NFIB's liking, the political and economic price of trying to blow up the legislation could be high, said the University of Kansas's Loomis.

"I'm not sure that they want to engage in the old game of interest-group politics," Loomis said. "Do they want to fight a popular president? The risk is that you just get run over, so you look ineffective. Or, if you do win, you are going to be in an even worse situation. Maybe Democrats expand their majorities in 2010, and you aren't going to get anything that you want."

Even conservative pollster Frank Luntz has cautioned House Republicans to tread carefully as they position themselves on the issue, because "if the dynamic becomes, 'President Obama is on the side of reform, and Republicans are against it,' then the battle is lost."

Furthermore, Republicans could find themselves totally shut out if they can't find common ground with Democrats. The White House and Senate Democratic leaders have said that if the legislative process stalls, they may employ the budget process known as reconciliation to pass health care reform, which would enable them to enact a bill without GOP support.

White House Chief of Staff Rahm Emanuel and aides to Senate Finance Chairman Max Baucus, D-Mont., have warned interest groups to hold their fire. "Rahm has put out the message, 'Come see me first before you decide to oppose this,' " a Democratic lobbyist said. "That makes people afraid."

Adds Kaiser's Altman: "We are about to enter a new stage."

Staff Correspondent Marilyn Werber Serafini contributed to this story.

CORRECTION: The original version of this report misidentified the members of the Divided We Fail campaign and misspelled David Abernethy's name.

This article appeared in the Saturday, June 20, 2009 edition of National Journal.

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