WASHINGTON Republicans' big victories in Congress could compel a second look at parts of President Barack Obama's sweeping healthcare overhaul, but any changes will be subtle and a far cry from the blanket repeal vowed by party leaders.
Democrats' continued control of the Senate, albeit with a smaller majority, and Obama's presidential veto power, leave the Republicans with only a weak hand in trying to push through aggressive changes.
"Regardless of Republican rhetoric ... last night's congressional results won't yield changes in healthcare reform law," said John Sullivan, an analyst at healthcare investment bank and equity research firm Leerink Swann.
The healthcare law, which passed this year without a single Republican vote, imposes tough new standards on health insurance companies and requires all Americans to buy coverage starting in 2014 or face fines, among other provisions. Republicans decried it as an overreach of government power that would not help hold down healthcare costs.
For now, health insurers, whose shares staged a slight rise Wednesday before later falling, must plow ahead with reforms.
Obama told reporters he was happy to consider some Republican ideas to improve the nation's healthcare system, but defended the law he signed in March as "the right thing to do."
Both he and U.S. Senate Majority Leader Harry Reid opened the door to possible "tweaks" of the healthcare overhaul.
But Republican leaders, riding a wave of victories that include at least 60 seats in the House of Representatives and six in the Senate, renewed their pledge to fully dismantle what they have dubbed "Obamacare."
U.S. Representative John Boehner, likely to be the next Speaker of the House, said Wednesday the law would kill jobs and bankrupt the nation. "That means that we have to do everything we can to try to repeal it and replace it with common sense reforms that will bring down the cost of healthcare insurance," he told reporters.
INSURERS INFLUENCE ON HEALTH REFORM RULES
Few experts saw any hope for a repeal with Democrats' continued grip on the Senate and no possible change in the White House until the 2012 election.
Investors, while noting the potential for political gridlock, said the divided government could still be a plus.
To the degree that having Republicans control the House forces the administration and the Democrats to try to think through certain parts of the bill in a more measured, rational way, that's a positive for the insurers," said Dave Shove an analyst for BMO Capital Markets, a financial services provider.
Still, Reid on Wednesday signaled a willingness to take another look at certain parts of the law, telling CNN that "If there's some tweaking we need to do with the healthcare bill, I'm ready for some tweaking."
At the same time, numerous states are challenging the reforms through various legal actions that could eventually reach the Supreme Court.
Health insurers, which include companies such as Humana Inc and WellPoint Inc, largely fought the overhaul, opposing new coverage practices and spending rules. But they see the mandate to buy insurance polices as a win in a nation where nearly 40 million people are uninsured.
"Everybody sees 30 or 40 million more customers and likes that idea," said Les Funtleyder, portfolio manager for institutional trading firm Miller Tabak & Co. "I don't think industry wants a repeal. They just want lighter regulations."
Insurers, which are in the midst of reporting quarterly earnings, are still awaiting many final regulations. Others already took effect in September with more coming January 1 -- before Republicans take over the House.
Aetna Chief Financial Officer Joseph Zubretsky told Reuters he hoped the new environment would be more favorable to business. "It is in the best interest of the American consumer to have a government that understands the role of business and not only doesn't vilify it but enables it to provide market based solutions."
Shares of insurers were off more than the broader market on Wednesday, largely on earnings results. The S&P Managed Health Care Index was down 1.08 percent in afternoon trading, while the S&P 500 index was down .27 percent.
(Reporting by Susan Heavey; Additional reporting by Lewis Krauskopf and Bill Berkrot in New York and Maggie Fox in Washington. Editing by Leslie Adler and Jackie Frank)