Schumer told The Associated Press Sunday night that those efforts have proved frustrating, saying that he and his Democratic colleagues now may have to go it alone.
The co-ops were seen as perhaps the last hope for compromise on the notion of a public health care option, a contentious issue that threatens any remaining prospects of bipartisan support for President Barack Obama's sweeping plan to remake the health care system.
"I don't think I could say with a straight face that this (co-op proposal) is at all close to a nationwide public option," Schumer, D-N.Y., said Sunday. "Right now, this co-op idea doesn't come close to satisfying anyone who wants a public plan."
The public plan that most Democrats envision would be offered alongside private plans through a new kind of insurance purchasing pool called an exchange. Individuals and small businesses would be able to buy coverage through exchanges, but eventually businesses of any size might be able to join.
Proponents say the option of a public plan in the marketplace would put a brake on costs and check the power of insurers. But Republicans, insurers and many business leaders say a government plan could drive private insurance companies out of business.
"The most important thing for us to make sure is that we do increase coverage to a basic plan for more Americans and the way we're going to do that is starting with where people get most of their health care, and that's their employer," House Minority Whip Eric Cantor, R-Va., said Monday. "We've got to be sure to make it so those employers can keep their health care costs down."
Cantor, appearing on ABC's "Good Morning America," said that "a government plan, no matter what you call it, will increase costs" and limit choices.
Two recent news media polls have found public support for a government plan, even if many people are unsure about its implications. The most recent survey, a New York Times-CBS News poll released Sunday, found that 72 percent supported the idea, including half of those who identified themselves as Republicans.
"The polling data backs up our substantive view that to make health care reform work, you need a public option," said Schumer.
Schumer's role is important because he had been acting as an intermediary between liberal Democrats and moderates who are trying to strike a deal on the issue with Republicans on the Senate Finance Committee. Of the five House and Senate committees working on health care, Finance is the only one that appears to have a chance at reaching a bipartisan agreement.
Schumer said Finance Republicans had rejected several proposals designed to beef up the suggested nonprofit insurance co-ops. These included setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.
Without "dramatic" changes, Schumer said he would oppose the co-ops deal and urge other Democrats to do so as well.
Obama has also been sending signals that he's ready to draw a line.
He recently said that if Congress wants a bipartisan bill, it's up to House and Senate Republicans. He said he would listen to GOP ideas, but was not going to force Democrats to include them when they write the final legislation. Obama told CNBC he has already taken steps to come to the middle on health care.
The Finance Committee compromise could be unveiled as early as this week. Senators were forced to start again last week because initial cost estimates were well above their 10-year, $1 trillion target.
The next few weeks will be pivotal in the debate. Democrats want to push ahead as far as they can before the July 4 congressional recess. Over the break, comments from constituents could determine whether Congress sticks to its goal of passing legislation this summer.