WASHINGTON -- Presidential scandal and a renewed focus on traditional concerns such as education have pushed risk management and benefits issues even lower than usual on the political radar screen with only two weeks before congressional elections.

Despite months of congressional debate over patients' rights, the question of how to regulate managed care plans hasn't risen to the forefront in many campaigns. Tort reform issues, which have energized business in previous election seasons, have taken a very low profile.

Nevertheless, risk managers, insurers and other observers regard the Nov. 3 elections as critical on both the state and local levels because they provide an opportunity to build on pro-business majorities in statehouses and Congress.

"This is a year of opportunity to get more market-oriented legislatures and governors" elected, said Jack Ramirez, president of the Des Plaines, Ill.-based National Assn. of Independent Insurers. He said President Clinton's troubles could lead to lower turnout among the president's supporters and increase the chance that pro-business candidates will win. Mr. Ramirez said the NAII will "devote more resources to races this year" than ever before.

A spokesman for the American Insurance Assn. in Washington said, "Our strategy and hope has been to elect as many pro-business people to Congress, state legislatures and governorships as possible."

David M. Farmer, senior vp in the Alliance of American Insurers' Washington office, said: "We're interested in the election of the next Congress of individuals who will be fair to business interests in a non-partisan fashion. It's our view that the election coming up probably has less to do with business issues than in previous elections. It appears that the principal issues on this election are more local in nature and that education appears to be the No. 1 issue on voter's minds."

Mr. Farmer said he sees a continued trend toward GOP gains on Nov. 3 but said that has more to do with long-term political dynamics "than it has to with any short-term difficulties that the president might have."

One short-term political trend that fizzled was betting on public anger over perceived problems with managed care as a sure-fire political issue.

"The best indicator of this is that the Democrats and the president chose to stress education issues in the waning days of the session. The bill of rights went out with almost less than a whimper in the Senate a few days ago," said Charles Kahn, chief operating officer and president-designate of the Health Insurance Assn. of America in Washington.

Mr. Kahn said he believes the Democrats decided to make managed care a campaign issue rather than a legislative one, but the "bubble burst" for several reasons. Republicans in the House passed their own version of managed care regulation. "And, clearly, the president's problems and stock market fall in August took the wind out of any issues other than those," he said. He added that insurer-business lobbying and the fact that managed care opponents "really overplayed their hand" also played a role in submerging the issue.

He noted that a Democratic attempt to use managed care as an issue in a special New Mexico House election this summer to fill the seat vacated by the death of GOP Rep. Steve Schiff failed; exit polls showed that managed care was not a major influence on the election. GOP Heather Wilson defeated Democratic state Sen. Phil Maloof and Green Party candidate Robert Anderson.

Mr. Kahn added, though, that the issue isn't likely to go away. "Just because the industry missed the bullet in '98 doesn't mean we don't have to be very vigilant in '99," he said.

Anne Allen, director-government affairs for the Risk & Insurance Management Society Inc. in New York, said, "I think health information privacy and employer/health insurance liability will be big issues on the state and federal level, as will Y2K liability" after the elections.

A spokesman for the Blue Cross/Blue Shield Assn. in Washington said, "Obviously, Democratic incumbents in particular certainly want to make health care an issue." He noted, though, that polling conducted for the Blues this summer did not show managed care regulation ranking even among the top three concerns of voters (BI, Sept. 14).

"I think HMO reform has been eclipsed by education reform as the 'focus group' issue of the final weeks. That being said, I think there's still an awful lot of managed care ads running around the country. We'll see on Nov. 4 how much of an impact that has had," said Joel Wood, senior vp-government affairs at the Council of Insurance Agents and Brokers in Washington.

He added that the issue will have an impact in some districts, particularly those with high percentages of senior citizens. He predicted that if the Democrats hold their own in the House and lose fewer than three Senate seats, it "will be widely perceived an exceptional showing, given the Clinton scandal and the historic six-year itch." If the Democrats achieve that, the results may be seen as a backlash against Independent Counsel Kenneth Starr and as proof that managed care had worked as an issue in some of the races, he said.

Mr. Wood said Democratic challenger Michael Cole has tried to use the issue against incumbent Sen. Paul Coverdell, R-Ga. But the issue seems to be strongest in North Carolina.

"Health is a big issue" in the North Carolina race between incumbent Sen. Lauch Faircloth, R-N.C., and his Democratic challenger, John Edwards, noted Frank McArdle, a consultant in Washington for Lincolnshire, Ill.-based Hewitt Associates L.L.C. Mr. McArdle pointed out that Sen. Faircloth was one of the few GOP senators who voted not to table Democratic "patients bill of rights" legislation. But his opponent, a prominent plaintiff's attorney, stressed HMO reform during the primary, and the issue has continued to pop up in the campaign.

Product liability advocates believe the elections could strengthen their hands.

"Nov. 3 is an important day as far as the legislative history of product liability reform is concerned, because there are so many races in the Senate where candidates' basic views on the subject are different," said James A. Anderson, vp-government relations for the National Assn. of Wholesaler-Distributors in Washington.

Mr. Anderson said he thinks pro-reform forces will be able to maintain a "solid majority" in the House. The Senate, where 60 votes are needed to end debate on a bill -- and where product liability reform has died repeatedly for the lack of 60 votes -- presents a different challenge.

Even so, Mr. Anderson said: "As you look at all the races, I think there is a blue-sky prospect. If everything were to go our way, there is a prospect to pick up as many as eight seats in the Senate," provided that all pro-reform lawmakers who seek re-election are indeed returned to Washington.

One of the races most likely to have an impact on liability reform is in South Carolina. Sen. Ernest Hollings, D-S.C., is facing one of the strongest challenges of his more than four decades of political life in the form of Rep. Bob Inglis, R-S.C.

During his five terms in the Senate, Sen. Hollings has been among the most vocal opponents of federal product liability reform and, as chairman of the Senate Commerce Committee before the GOP victory of 1994, was able to kill several initiatives. Rep. Inglis, on the other hand, was among the representatives who voted to override President Clinton's veto of a mild product liability bill in 1996.

Ms. Allen said another race of interest to risk managers pits Ohio Republican Gov. George Voinovich against Democratic former Cuyahoga County Commissioner Mary Boyle for the Senate seat being vacated by Sen. John Glenn, D-Ohio. She pointed out that Gov. Voinovich presided over the enactment of major tort reform.

Wisconsin and Mississippi feature other congressional races of interest.

In Wisconsin, former Insurance Commissioner Jo Musser hopes to follow another former president of the National Assn. of Insurance Commissioners -- Rep. Earl Pomeroy, D-N.D -- into the House of Representatives. Ms. Musser, a Republican, faces Democratic state Rep. Tammy Baldwin in the election to succeed retiring Rep. Scott Klug, R-Wis.

And in Mississippi, GOP Delbert Hosemann, a tax attorney who has represented Lloyd's of London and done offshore captive tax work, is now in a toss-up race with Democrat Ronnie Shows. Mr. Hosemann "would be one of the very rare members of Congress who would truly understand a lot of the regulatory implications of insurance, reinsurance and group health and employee benefits issues," said the CIAB's Mr. Wood.

But not all the action is national -- observers can point to some state races of importance as well.

"With respect to the governors' races, the big kahuna is going to be California, because both statehouses are controlled by Democrats, and a Republican governor will be key to blocking any adverse legislation," said a spokesman for the American Insurance Assn. in Washington. GOP Attorney General Dan Lungren currently trails Democratic Lt. Gov. Gray Davis in the race to succeed GOP Gov. Pete Wilson.

"Having a somewhat more conservative, more reasonable person in the governor's chair is important to the industry," agreed NAII's Mr. Ramirez.

"Judicial races in Alabama races are big, too. The Alabama Supreme Court is a court that has been on the cutting edge against what we would say is reasonable tort law for quite some time," he said.

RIMS joined the non-partisan Judicial Education Alliance and will be particularly interested to see if Chief Justice Craig Enoch, regarded as pro-business, retains his seat on the state's Supreme Court, said Ms. Allen.