The US Senate on Friday rejected the Republicans' latest alternate healthcare bill intended to repeal Obamacare, the media reported.

Republican Arizona Senator John McCain cast the decisive vote to defeat the proposal, joining two other Republicans, Susan Collins of Maine and Lisa Murkowski of Alaska, in opposing it, reports The New York Times.

The 49-to-51 vote was a huge setback for the majority leader, Mitch McConnell of Kentucky, who has spent the last three months trying to devise a repeal bill that could win support from members of his caucus.

The eight-page Senate bill, called the Health Care Freedom Act, was unveiled on Thursday night just hours before the vote. 

The "skinny" repeal bill would increase the number of people who are uninsured by 15 million next year compared with current law, according to the non-partisan Congressional Budget Office.

Premiums for people buying insurance on their own would increase by roughly 20 per cent, the budget office said, The New York Times reported.

This bill would put an end to the obligation to have health insurance or risk paying a fine, one of the most unpopular clauses in former President Barack Obama's 2010-promulgated health reform called the Affordable Care Act.

Moreover, the bill would leave no federal funds for the reproductive rights organisation "Planned Parenthood" and would give states flexibility in complying with some of the protections guaranteed by Obamacare.

In addition, the bill would make it much easier for states to waive federal requirements that health insurance plans provide consumers with a minimum set of benefits like maternity care and prescription drugs. 

It would also eliminate funds provided by Obamacare for a wide range of prevention and public health programmes.

House Speaker Paul Ryan, in a statement earlier on Thursday, expressed his willingness to negotiate with the Senate on drafting a bill that could be signed by Trump, reports Efe news.

"If moving forward requires a conference committee, that is something the House is willing to do," Ryan said. 

"The reality, however, is that repealing and replacing Obamacare still ultimately requires the Senate to produce 51 votes for an actual plan."