* After marathon proceedings, two House panels approve bill
* McConnell says Republicans must get into “governing mode”
* Measure is first major legislative test for Trump
* Hospital stocks gain, shares in health insurers mixed (Recasts with approval by second House committee)
By Susan Cornwell and Yasmeen Abutaleb
WASHINGTON, March 9 (Reuters) - The Republican plan backed by President Donald Trump to overhaul the U.S. healthcare system cleared its first hurdles in Congress on Thursday, but its chances for passage looked uncertain and top Republicans scrambled to bring disgruntled conservatives aboard.
In the face of opposition by Democrats, healthcare providers and many conservatives, two House of Representatives committees approved the legislation that would undo much of the 2010 Affordable Care Act, popularly known as Obamacare, moving it closer to a vote before the full House.
Despite unified Democratic opposition, the Energy and Commerce Committee voted 31-23 to back the plan after marathon proceedings lasting 27 straight hours. Hours earlier, the tax-writing Ways and Means Committee voted 23-16 before dawn to approve it after working 17 straight hours.
House Speaker Paul Ryan sought to bolster support among conservatives in his own party, Senate Majority Leader Mitch McConnell said fellow Republicans must get in a “governing mode” while Trump denied the bill was in trouble.
“Despite what you hear in the press, healthcare is coming along great. We are talking to many groups and it will end in a beautiful picture!” the Republican president said on Twitter.
Hospital shares gained on Thursday, with Healthcare Tenet rising 5 percent. Hospital stocks had fallen after the bill was announced on Monday, with shares of Tenet and Community Health Systems in particular selling off. Health insurers’ shares were mixed, with Medicaid-focused insurers lower including Molina Healthcare’s 2.2-percent drop.
While Republicans have been itching for seven years to dismantle Democratic former President Barack Obama’s signature domestic policy achievement, the party has failed to coalesce behind the plan unveiled on Monday by House Republican leaders.
Republicans control the White House and both houses of Congress for the first time in a decade, but passage of the legislation was not a foregone conclusion.
Conservative lawmakers and lobbying groups have lambasted it as too similar to Obamacare. They have sharply criticized its proposed tax credits to coax people to buy private insurance on the open market as an unacceptable new government entitlement program and have called for a quicker end to the Obamacare expansion of the Medicaid healthcare program for the poor.
The measure is the first major legislative test for Trump and his fellow Republicans amid questions about whether they can govern effectively after years spent as an opposition party under Obama.
Ryan, with his shirt sleeves rolled up and using a video screen with facts and figures, held what he called a “townhall-style” presentation for reporters on the proposal. But his intended audience appeared to be fellow Republicans, and he said his party must “actually make good on our word.”
“The time is now,” said Ryan, who long has been the target of criticism of some conservatives. “This is the closest we will ever get to repealing and replacing Obamacare,” Ryan added.
McConnell had a similar message for fellow Republicans: “We need to deliver.”
“When you have a president of a different party, you can freelance all you want to,” McConnell told an event sponsored by the Politico news organization. “We need to get into a governing mode and start thinking about actually achieving something rather than just kind of sparring,” McConnell added.
The bill proposes changes in Medicaid funding that could hurt smaller, less diverse health insurers, Fitch Ratings said on Thursday, and the unintended, unforeseen consequences of a bill this size are likely to create uncertainty for all health insurers.
With doctors, hospitals, seniors, health plans, Democrats, governors and conservative Republicans against the bill, it may not make it out of the House, Mario Molina, chief executive of managed care company Molina Healthcare, said in an interview.
“If it does, I think the Senate is going to slow things down and really take a good look,” Molina said. “We are going to have to hope that the Senate is more moderate.”
‘OBAMACARE’ VS. ‘TRUMPCARE’
Democrats denounced the bill as a gift to the rich that would force millions of people off of insurance rolls.
“Trumpcare is a loser for just about all of America, unless you’re in the top 1 percent,” Senate Democratic Leader Chuck Schumer said.
Trump met with leaders of conservative groups on Wednesday but they remained opposed to key elements of the legislation. Vice President Mike Pence and Health and Human Services Secretary Tom Price held a series of meetings with lawmakers to try to win over Republicans.
Once the two committees have approved their parts of the legislation, the House Budget Committee is expected to merge them into one bill to be voted on by the full House. Republicans are eyeing mid-April for passage of the bill.
Emotions were raw at times during the House committee proceedings.
“I personally take great offense, and I‘m embarrassed for you,” Republican Representative John Shimkus told Democrats over an amendment relating to healthcare access for military veterans.
Obamacare enabled 20 million previously uninsured people to obtain coverage. About half came from a Medicaid expansion that the new bill would end. Republicans have called Obamacare a government overreach that ruined the more than $3 trillion U.S. healthcare system.
In a series of tweets early on Thursday, conservative Republican Senator Tom Cotton urged his House colleagues to pull back, saying their measure could not pass the Senate without major changes. “What matters in long run is better, more affordable health care for Americans, NOT House leaders’ arbitrary legislative calendar,” he wrote.
But White House spokesman Sean Spicer expressed confidence in the legislation’s prospects. “We’re not jamming this down people’s throat,” Spicer said. “This bill will land on the president’s desk. He will sign it. We will repeal Obamacare.”
The credit rating agency Standard & Poor’s has estimated 6 million to 10 million people could lose health insurance coverage under the Republican plan.
The Republican legislation would replace Obamacare’s income-based subsidies to help people obtain medical coverage with a system of fixed tax credits to coax people to buy private insurance on the open market, end the financial penalty for not having health insurance, reverse most Obamacare taxes and end the Medicaid expansion.
The plan’s cost and its impact on nationwide health insurance coverage remained unknown, with the nonpartisan Congressional Budget Office not expected to give its assessment until early next week.
America’s Health Insurance Plans, which represents Anthem Inc and other insurers, said tax credits for the individual insurance market did not go far enough.
Additional reporting by David Morgan, Brendan O'Brien, Susan Heavey and Doina Chiacu; Writing by Nick Tattersall and Will Dunham; Editing by Lisa Von Ahn and Tom Brown