Two more Republican senators have said they oppose their party’s replacement for President Obama’s health system, making it impossible for the bill to pass in its current form.
Mike Lee and Jerry Moran say the new legislation does not go far enough in repealing the health legislation.
Republicans have been divided on the issue, with moderates concerned about the effects on the most vulnerable.
President Donald Trump made repealing Obamacare a key campaign pledge.
“Regretfully, it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful,” Senate Majority Leader Mitch McConnell said.
The Republican plan had kept key Obamacare taxes on the wealthy, while allowing insurers to offer less coverage and imposing sharp cuts to healthcare for the poor.
With the two new opponents, Republicans – who hold 52 seats – no longer have enough votes to pass the bill in the 100-member Senate.
The two senators simultaneously announced their opposition to the planned reforms, joining senators Rand Paul and Susan Collins, who were also against the bill.
Mr Moran said “we should not put our stamp of approval on bad policy” while for Mr Lee, “in addition to not repealing all of the Obamacare taxes [the bill] doesn’t go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations.”
Mr McConnell said he would try to pass a repeal of Obamacare with a two-year delay implementation that would provide a “stable transition period” to a new legislation.
Correspondents, however, say that this plan has little chance to pass as, under the interim period, millions would be left without healthcare.
Republican Senator John McCain, who is recovering from surgery in his home state of Arizona, called for a bipartisan strategy to discuss the plan.
“The Congress must now return to regular order, hold hearings, receive input from members of both parties,” he said in a statement.
Democrats have said they will not co-operate to repeal Obamacare, but that they can work in a bipartisan way to improve it.
Senate Democratic Leader Charles Schumer said on Twitter: “This second failure of Trumpcare is proof positive that the core of this bill is unworkable.”
A similar version of the bill was approved by the House of Representatives in May, but analysts predicted a more turbulent process in the Senate, given the different positions.
Congress has been delaying its summer holiday in a bid to overturn former President Barack Obama’s 2010 legislation.
