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UPDATE 1-Trump administration asks for time to weigh Obamacare subsidies

(Adds details on case, background)

WASHINGTON, May 22 (Reuters) - The Trump administration and U.S. House of Representatives Republicans on Monday told a federal court they have not yet decided on how to proceed in a major case that could end cost-sharing subsidies paid to insurers that are vital to the functioning of the Obamacare healthcare law.

In a joint filing submitted to the U.S. Court of Appeals for the District of Columbia Circuit, the administration and Republican lawmakers who had previously challenged the payments asked for more time to consider their options.

The case, which dates back to the Obama administration, was filed by the Republican-led House against the federal government in an effort to cut off subsidy payments for the individual plans created by the Affordable Care Act, also known as Obamacare.

Insurers and medical groups have been pressing the administration for months to continue funding the payments, which amount to about $7 billion this year and help low-income consumers pay for out-of-pocket medical costs. Insurers say the uncertainty about the payments may cause them to raise rates or leave the individual marketplace.

Several insurers, including Aetna Inc and Humana Inc , have already exited the Obamacare marketplace for 2018, citing a pool of patients who are sicker than expected and therefore more expensive.

The Republican-led Congress is working on legislation to repeal and replace Obamacare. The bill, called the American Health Care Act, narrowly passed the House earlier this month. The Senate is writing its own version of the bill.

On Thursday, more than a dozen Democratic state attorneys general sought to intervene in the case due to concerns that the Trump administration is seeking to sabotage the Affordable Care Act.

Democratic attorneys general and proponents of Obamacare have said the threats to withhold the payments have already wreaked havoc in the marketplaces and are part of the reason some healthcare consumers have seen double-digit rate increases next year. The administration and House Republicans said they will respond separately to that request. (Reporting by Lawrence Hurley and Yasmeen Abutaleb; Editing by Will Dunham)