US Congress Democrats accused President Donald Trump of “punishing the American people” after he cut government subsidies that underpin the Obamacare health programme.

Democratic Senate leader Chuck Schumer and House of Representatives leader Nancy Pelosi warned on Thursday night that “millions of hard-working” working-class families would suffer from the “spiteful act.”

Mr Trump’s surprise announcement late on Thursday night stops federal subsidies to insurance companies worth about $9 billion (£7bn) in the coming year.

The “cost-sharing reduction payments” help to reduce the out-of-pocket costs of low-income people.

Ending the subsidies is expected to increase the cost of insurance by 20 per cent and prompt insurers to leave “health exchanges” which impose minimum standards and bar discrimination against the elderly and sick.

An extra 1 million people won’t be able to afford healthcare as a result, the Congressional Budget Office estimates.

Paradoxically, cutting the subsidies will end up costing the US government more money because of how tax credits work for health insurance.

Mr Trump has often railed against the private insurance industry which dominates US healthcare — a small amount is paid for by the government Medicare and Medicaid programmes — but his policy is to perpetuate rather than challenge it.

In a 1,100-word directive to government agencies sent just before he ordered the cut, Mr Trump laid out his vision of healthcare. It consisted mostly of insurance that covers fewer conditions, offers less treatment and is exempt from anti-discrimination rules.

Mr Trump also wants for greater use of short-term coverage — a stop-gap measure mostly used by people without employer-provided healthcare or enough money to afford their own insurance.