×

UPDATE 6-White House says Trump opposes Senate's bipartisan Obamacare deal

* Senator Alexander says Trump "completely engineered" deal

* Key Republican senator says bipartisan deal has "stalled"

* Democrat Schumer blasts Trump's shifting stances (Adds Senator Hatch quotes, Republicans in support of agreement)

WASHINGTON, Oct 18 (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 signaled opposition to the deal announced on Tuesday by Republican Lamar Alexander and Democrat Patty Murray to 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 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" short-term approach but later on Tuesday and then on Wednesday said he would not support a plan that enriched 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 does 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."

Senator John Thune, a member of the Senate Republican leadership, said the Alexander-Murray 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," Republican Senate Finance Committee chairman Orrin 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."

It remained unclear whether the proposal would ever come to a vote in the Senate or House.

"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, Democratic former 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.

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 on Tuesday he eventually wanted broader legislation to repeal and replace the law.

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.

'HOW HIGH?'

While the proposal drew broad Democratic support, it remained unclear whether it will even come to a vote in the Senate and House, both controlled by Trump's fellow Republicans.

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 Alexander-Murray 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 by Thursday to direct the administration to continue the payments.

Murray, speaking to Reuters on Wednesday, said her agreement with Alexander was still very much alive.

"Absolutely," Collins 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.

Trump said on Tuesday he wanted lawmakers, once they have completed work on his tax-cut proposal, to again take up broader legislation that failed in the Senate last month that would divvy up federal healthcare money as block grants to states. (Reporting by Yasmeen Abutaleb and Amanda Becker; Additional reporting by Ricard Cowan, Lawrence Hurley, Jeff Mason, Makini Brice, Susan Heavey and Roberta Rampton; Writing by Will Dunham; Editing by Bill Trott)