Senate Rejects Slimmed Down Obamacare Repeal as McCain Votes No

The new, eight-page Senate bill, called the Health Care Freedom Act, was unveiled just hours before the vote. It would end the requirement that most people have health coverage, known as the individual mandate,, but it would not put in place other incentives for people to obtain coverage — a situation that insurers say would leave them with a pool of sicker, costlier customers. It would also end the requirement that large employers offer coverage to their workers.

The “skinny repeal” would delay a tax on medical devices. It would also cut off federal funds for Planned Parenthood for one year and increase federal grants to community health centers. And it would increase the limit on contributions to tax-favored health savings accounts.

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 the Affordable Care Act for a wide range of prevention and public health programs.

Before rolling out the new legislation, Senate leaders had to deal with a rebellion from Republican senators who demanded assurances that the legislation would never become law.

Senators Lindsey Graham South Carolina, John McCain of Arizona and Ron Johnson of Wisconsin, all Republicans, demanded ironclad assurances from House leaders that the bill would not be enacted.

“I’m not going to vote for a bill that is terrible policy and horrible politics just because we have to get something done,” Mr. Graham said at a news conference, calling the stripped-down bill a “disaster” and a “fraud” as a replacement for the health law.

On Thursday night, Mr. Ryan tried to reassure senators as he goaded them to act. “If moving forward requires a conference committee, that is something the House is willing to do,” he said in a statement. “The reality, however, is that repealing and replacing Obamacare still ultimately requires the Senate to produce 51 votes for an actual plan.”

But Mr. Ryan did leave open the possibility that if a compromise measure fails in the Senate, the House could still pass the stripped-down Senate health bill. Late Thursday night, Mr. Graham said that he now felt comfortable and would vote for the measure.

Senator John Cornyn of Texas, the No. 2 Senate Republican, said the scaled-down bill was “a vehicle to get to conference” with the House, which in May passed a more ambitious bill that would repeal much of the 2010 health care law and make deep cuts in projected Medicaid spending.

That was an unusual pitch, considering that in normal House-Senate conferences each chamber advocates its version of a bill.

“The skinny plan manages to anger everyone — conservatives who know it’s a surrender and know it doesn’t come close to the full repeal they promised, and moderates who know it will be terrible for their constituents,” said the Senate Democratic leader, Chuck Schumer of New York. He added, “You don’t vote to advance terrible legislation and hope it magically gets better in conference.”

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Mr. Graham, right, called the Senate bill a “disaster,” and Mr. Johnson, left, said it “doesn’t even come close to honoring our promise of repealing Obamacare.”

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Gabriella Demczuk for The New York Times

Republicans found themselves in the strange position of hoping their bill would never be approved by the House.

“It may very well be a good vehicle to get us into conference, but you got to make sure that it’s not so good that the House simply passes it rather than going to conference,” said Senator Michael Rounds, Republican of South Dakota. Mr. Rounds, who built a successful insurance business in his home state, said he was concerned that “the markets may collapse” if the Senate bill ever took effect.

Two influential House conservatives made clear that they did not want to simply pass the Senate bill. Representative Mark Walker, Republican of North Carolina and the chairman of the conservative Republican Study Committee, said he favored a conference, calling the bill “ugly to the bone.”

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And Representative Mark Meadows, Republican of North Carolina and the chairman of the hard-line Freedom Caucus, said that for many conservatives, it would be a “nonstarter” to send President Trump a bill that has “gotten so skinny that it doesn’t resemble a repeal.”

But senators had at least some reason to be nervous. The House majority leader, Kevin McCarthy of California, notified House members that “pending Senate action on health care,” the House schedule could change, and that “all members should remain flexible in their travel plans over the next few days.” That did not sound like a man preparing for protracted House-Senate negotiations.

Representative Chris Collins, Republican of New York and a key ally of Mr. Trump, said the stripped-down bill would be “better than nothing” if it became apparent that the Senate did not have the votes for a more ambitious bill.

“It becomes a binary choice,” he said. “If it’s this or nothing, who wants to go home and say I did nothing?”

“No one can guarantee anything,” he added, sending a message to senators wanting assurances.

Relatively modest as it is, the Senate bill could have a large effect, especially with the repeal of the individual and employer mandates.

“The one thing that unifies our conference is the repeal of the individual mandate and the employer mandate, because those are two of the biggest overreaches of Obamacare and are essential to Obamacare’s functioning,” Mr. Cornyn said.

But without another mechanism to push Americans to maintain insurance coverage, the repeal of those mandates, coupled with the continued Affordable Care Act prohibition on insurers discriminating against customers with pre-existing conditions, could have significant consequences. Healthy people could wait to buy insurance until they are sick. The insurance markets would become dominated by the chronically ill, and premiums would soar, insurers warned.

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America’s Health Insurance Plans, the Blue Cross Blue Shield Association and the American Medical Association all expressed similar concerns.

“We would oppose an approach that eliminates the individual coverage requirement, does not offer alternative continuous coverage solutions, and does not include measures to immediately stabilize the individual market,” said America’s Health Insurance Plans, a trade group for the industry.

On the other side, the Trump administration twisted arms. Mr. Trump directed Interior Secretary Ryan Zinke to call Senator Lisa Murkowski of Alaska to remind her of issues affecting her state that are controlled by the Interior Department, according to people familiar with the call, who requested anonymity because they were not authorized to speak to the press.

Ms. Murkowski, one of two Republicans to vote against starting the health care debate, confirmed to reporters that she had received a call from Mr. Zinke, but declined to describe the details. However, people familiar with the call described her reaction to it as “furious.”

Republican senators were briefed on the bill at lunch on Thursday, but the measure remained a work in progress throughout the day.

“I don’t know whether the end’s going to be fat or skinny or anorexic or bulimic,” said Senator John Kennedy, Republican of Louisiana.

“It’s kind of messy,” he added. “But it’s pretty, in a way, because this is how democracy works.”

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