By Nick Carey

CHICAGO, June 4 (Reuters) - As rising health costs erode profits, U.S. corporations are expected to warm up to health care reform under the next president -- a prospect that would have been unthinkable just a few years ago.

"In 2004, when John Kerry and George W Bush fought the presidential election, I can't think of any business group that called on either candidate to launch health reform," said Jason Furman, director of the Hamilton Project, an initiative of the Brookings Institution think tank. "This time, I think it will be different."

The U.S. private sector has traditionally been seen as opposing health reform as it could mean either higher taxes or greater state involvement -- both anathema to business.

But thanks to burgeoning health costs, analysts say that, with the possible exception of some pharmaceutical firms and health insurers, the private sector accepts reform is needed and is likely to be championed by the Democrats if they win the 2008 presidential or Congressional elections.

"We really are getting to the end of our rope with health care costs," said Robert Laszewski president of health care consulting firm Health Policy and Strategy Associates, Inc. "You won't get Republican CEOs proposing anything radical. More likely they'll say: 'Here, just take the damn thing.'"

The National Coalition of Health Care estimates the average annual premium for an employer health-care plan for a family of four is nearly $11,500. According to the U.S. Census Bureau, almost 45 million Americans have no health insurance.

Double-digit increases in premiums every year for much of the last decade have encouraged some corporate behemoths such as General Electric Co. <GE.N> and Wal-Mart Stores Inc. <WMT.N> to urge changes to the system -- Wal-Mart wants universal health care coverage for all Americans by 2012 -- but have made no specific reform proposals.

Companies such as Wal-Mart are also receiving a push from some shareholders.

At the retailer's shareholder meeting last Friday, a proposal from the Interfaith Center on Corporate Responsibility (ICCR) -- a coalition of 275 faith-based investors with an estimated $110 billion in assets between them -- called on Wal-Mart to say how it would address health care reform.

Although the proposal was defeated, Margaret Weber, corporate responsibility coordinator at ICCR member the Basilian Fathers of Toronto, said the proposal had served its purpose.

"The idea is to bring the issue of health care into the open and engage companies in the debate on reform," she said.

HEAVY LEGACY

Some American companies complain that health costs for employees past and present, plus their dependents, are hurting business.

Marcey Evans, health care spokeswoman at Ford Motor Co. <F.N>, said the company covers 570,000 people and spent $3.5 billion on health care last year. This, she said, "adds $1,200 to the cost of every vehicle we produce."

Even factoring in foreign competitors' health costs, Ford still pays $600 more per vehicle extra.

"This puts us at a competitive disadvantage," Evans added.

While not everyone has a legacy like Ford's or fellow Detroit automakers General Motors Co. <GM.N> and DaimlerChrysler AG's <DCXGn.DE> Chrysler unit, all U.S. companies are feeling the effect of rising costs, Weber said.

"(U.S. firms) are the ones paying for health care and they're feeling the pain," she said. "If they don't pay their reputation suffers, so it's in their interest to back reform."

"Many companies are ready to participate constructively in reform instead of obstructing it."

The Hamilton Project's Furman said there is "growing acceptance in the private sector that reform is a necessity based on individual, corporate and government participation."

But companies do appear reluctant to discuss particulars.

Ford's Evans said the company "welcomes dialogue on this national problem," but does not endorse any proposal.

And Katie Strong, director of congressional and public affairs for the U.S. Chamber of Commerce, said: "We're still far from the next presidential elections and there are no concrete plans on the table for us to comment on."

Dean Baker, co-director for the Center for Economic and Policy Research, said corporate reluctance to discuss policy specifics reflects long-standing opposition to health reform.

"While the private sector knows it needs to participate in this process, it's unlikely to be a standard bearer for reform," Baker said.

Harvard University Professor of health policy and political analysis Robert Blendon went further, saying American businesses are stuck between the need for reform and gratitude to the current Republican administration.

"The business community has been treated very well by George Bush and does not want to appear ungrateful by backing any particular reform," Blendon said. "The private sector will be a force of dissatisfaction, but not a force for change."

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