January 15, 2015 / 10:45 PM / 5 years ago

U.S. healthcare executives say Obamacare is not going anywhere

SAN FRANCISCO/WASHINGTON (Reuters) - U.S. healthcare executives say Obamacare is likely here to stay, despite repeated calls from Republican lawmakers for repeal of the 2010 law aimed at providing health coverage for millions of uninsured Americans.

Julian Gomez (R) explains Obamacare to people at a health insurance enrolment event in Commerce, California March 31, 2014. REUTERS/Lucy Nicholson

Top executives who gathered in San Francisco this week for the annual J.P. Morgan Healthcare conference, say that while President Obama’s signature domestic policy achievement may well be tweaked, it is too entrenched to be removed.

The Obama administration said in November that it aims to have over 9 million people enrolled in government-backed federal and state health insurance marketplaces in 2015, their second year of operation. Another 10 million have enrolled for coverage under an expansion of the Medicaid program for the poor.

Opponents of the law in the newly-elected Congress, now dominated by Republicans, seek to replace Obama’s Affordable Care Act with their own healthcare reforms. Some are betting that the U.S. Supreme Court strikes down the federal tax subsidies helping the uninsured buy coverage in 36 states.

For private health insurers and hospitals, the addition of millions of new covered patients has helped buoy their profits. Drugmakers have benefited from the increase in the number of patients eligible for reimbursement of prescription medications.

Repeal of the Affordable Care Act “is not a possibility,” George Scangos, chief executive officer at biotechnology company Biogen Idec Inc, said in an interview. “They would somehow have to explain to millions of people that they will lose health insurance.”

Aetna Inc, the third biggest health insurer, said it is talking to Republicans and Democrats about a possible “grand bargain” to salvage Obamacare if the Supreme Court up-ends the healthcare law later this year.

“Blowing up the (Affordable Care Act) is like shutting down the government,” Aetna Chief Executive Officer Mark Bertolini told a small group of investors. “So we are having conversations on both sides of the aisle about what ... things you change in the ACA, what we could introduce, about how to make a grand bargain should the Supreme Court decide.”


The Supreme Court is due on March 4 to hear oral arguments in the case, with a ruling expected in June.

“We’re working on a proposal to lay out the transition, to make sure we can deal with this effectively and quickly,” said Senator John Barrasso, chairman of the Senate Republican Policy Committee.

“Putting aside the Supreme Court challenge, I don’t see a veto-proof majority” in Congress to overturn the law, said Merck & Co Inc Chief Executive Officer Kenneth Frazier. “I would expect changes in the structure of the law, not a wholesale repeal.” 

Some key changes Republicans are expected to target include Obamacare’s employer mandate, which requires businesses with at least 50 full-time workers to offer health coverage to their employees or pay a penalty, according to congressional aides and lawmakers.

Republican lawmakers also want to change the law’s definition of “full time” as any employee who works 30 hours a week or more, provisions that compensate health insurers for market losses and an excise tax on medical devices, including the machines that produce CAT scans and magnetic resonance images.

The strategy around replacing Obamacare was expected to be a topic this week during a meeting of Republican leadership in Pennsylvania, congressional aides said.

Sylvia Burwell, Secretary of the U.S. Department of Health and Human Services, which oversees the law’s implementation, said that Republican efforts to replace Obamacare are happening “despite increasing evidence that the law is working.”

A Gallup survey showed that the percentage of Americans without health insurance fell 4.2 percentage points to just under 13 percent at the end of 2014.

“I don’t think it will go away,” said Jean-Jacques Bienaimé, Chief Executive Officer at BioMarin Pharmaceutical Inc. “There will probably be some adjustments.” He said the ACA has helped companies like BioMarin that specialize in drugs for rare diseases because it prohibits lifetime caps on reimbursement, even for expensive medications.

Additional reporting by Caroline Humer; Editing by Michele Gershberg, Bernard Orr

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