By Yasmeen Abutaleb and Amanda Becker
WASHINGTON (Reuters) - A bipartisan deal from two senators to stabilize Obamacare by restoring subsidies to health insurers suffered major setbacks on Wednesday with the White House saying President Donald Trump now opposes it and senior Republicans speaking out against it.
House of Representatives Speaker Paul Ryan, Senate Finance Committee Chairman Orrin Hatch, Senate Republican leadership member John Thune and others expressed hostility to the deal announced on Tuesday by Republican Lamar Alexander and Democrat Patty Murray. It was uncertain if it would ever come to a vote in a Congress controlled by Trump's fellow Republicans.
The agreement would shore up Obamacare by reviving billions of dollars of federal subsidies to insurers for two years to help lower-income Americans obtain medical coverage.
Alexander said on Wednesday that Trump had "completely engineered" the bipartisan proposal, but the president backed away from support he had expressed a day earlier.
On Tuesday, Trump said the White House was involved in the negotiations and that the agreement was "a very good solution" for a short-term approach, but said on Wednesday he could "never support bailing out" insurance companies.
Trump has cut off subsidies to the companies, saying Congress has not provided money for them and that they enrich insurers.
White House spokeswoman Sarah Sanders said Trump did not support the deal in its current form, although she called it "a good step in the right direction."
"Look, we've said all along that we want something that doesn't just bail out the insurance companies but actually provides relief for all Americans," she said at a briefing. "And this bill doesn't address that fact."
BILL'S FATE AN 'OPEN QUESTION'
The confusion among lawmakers in both parties over Trump's position on the healthcare deal and the lack of trust some of them have in the president come as Congress is entering a crucial period when important bills on federal spending, the U.S. debt limit and tax cuts are due for consideration.
Thune said the agreement might have "stalled out" and that its future was an "open question." Republicans have a 52-48 Senate majority, but other than Alexander only a few have publicly embraced the plan, including Senators John McCain, Susan Collins, Lisa Murkowski, Mike Rounds and Bob Corker.
"No way to pay for it," Hatch said. "Oh my gosh, give me a break. I appreciate the innovation and the attempt to do it right. But it doesn't help."
Trump, who campaigned on a promise to get rid of Obamacare but has been frustrated by the failure of Republicans in Congress to pass legislation to do so, also made clear he wanted broader legislation to repeal and replace the law.
"Lamar Alexander's working on it very hard from our side. And if something can happen, that's fine," Trump told reporters at the White House. "But I won't do anything to enrich the insurance companies. ... They've been enriched by Obamacare like nothing anybody's ever seen before."
Insurers say they do not profit from the subsidies under the Affordable Care Act, former Democratic President Barack Obama's signature legislative achievement dubbed Obamacare, but pass them on directly to consumers to reduce deductibles, co-payments and other out-of-pocket medical expenses for low-income people.
Ending the subsidies, which are called cost-sharing reduction payments, could create chaos in the 2018 health insurance markets set up under Obamacare.
Some leading insurers, including UnitedHealth Group, Aetna Inc and Humana Inc, have largely exited those markets, citing financial losses. Others including Anthem Inc have significantly reduced their presence in the state-based markets.
Ryan gave no indication of willingness to consider the Alexander-Murray agreement. "The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare," Ryan spokesman Doug Andres said.
The proposal drew broad Democratic support. Top Senate Democrat Chuck Schumer ripped Trump for his shifting stances on the Alexander-Murray deal.
"This president cannot govern if, whenever the hard right frightens him and says: 'Jump,' he says: "How high?'" Schumer told reporters.
"The president is pointing fingers," Schumer said. "He blames (Senate Majority Leader) Mitch McConnell for obstruction. He blames the Democrats for obstruction. He's the obstructionist in chief because he cannot stick to a position."
The proposal would meet some Democratic objectives, such as reviving subsidies for Obamacare and restoring $106 million in funding for a federal program that helps people enroll in insurance plans.
In exchange, Republicans would get more flexibility for states to offer a wider variety of health insurance plans while maintaining the requirement that sick and healthy people be charged the same rates for coverage.
Democratic attorneys general from 18 states and the District of Columbia who have filed a legal challenge to the subsidy cutoff asked a judge in California to direct the administration by Thursday to continue the payments. At a hearing on Wednesday, U.S. District Judge Vince Chhabria in San Francisco said he would likely rule on the states' request next week.
Murray, speaking to Reuters on Wednesday, said her agreement with Alexander was still very much alive.
"Absolutely," Murray said. "Lamar and I are working to have a good set of co-sponsors," and hope to formally introduce it as a Senate bill on Thursday.
(Reporting by Yasmeen Abutaleb and Amanda Becker; Additional reporting by Ricard Cowan, Lawrence Hurley, Jeff Mason, Makini Brice, Susan Heavey and Roberta Rampton in Washington and Dan Levine in San Francisco; Writing by Will Dunham; Editing by Bill Trott and Peter Cooney)