Senate Majority Leader Mitch McConnell is taking a risk by calling for a bipartisan health-care plan if the Republican-only bill fails: While his comments may encourage conservatives to fall in line with his approach, party moderates may be emboldened to abandon the GOP legislation, which aimed to combine tax cuts and deep reductions in health spending.

McConnell told a home-state Kentucky audience Thursday that if Republicans can’t “agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur.”

His remarks to a Rotary Club luncheon in Glasgow could serve as a warning to the holdout conservative Republicans most ideologically opposed to Obamacare — but also may give wavering moderates cover to oppose the GOP plan.

Republicans can’t leave the Affordable Care Act untouched, as insurers are pulling out of some areas, but prospects of a dramatic rewrite are dimming under the party’s wafer-thin 52-48 majority, analysts said. Republican leaders can lose no more than two votes in their party amid united Democratic opposition.

Possible revisions

A Senate GOP aide said that a revised bill is likely to boost proposed spending to further stabilize premium costs in Obamacare’s insurance exchanges.

McConnell is considering additional changes designed to attract more Republican support for the effort. That will likely include revisions to Medicaid after talks among Republican senators about the varying needs of their home-state Medicaid beneficiaries, the Republican aide said.

While no final decisions have been made, Republican leaders are considering axing plans to repeal nearly all of the tax increases that help finance the Affordable Care Act, said the GOP aide. Tax cuts that could be removed from the GOP health bill include a repeal of a 3.8 percent investment tax on high-income earners, and a Medicare earned income surcharge on the wealthy.

Those two tax increases generate nearly $231 billion in revenue over a decade, according to the Joint Committee on Taxation, so leaving them in place could create budget wiggle room for Medicaid or other health expenditures demanded by holdout moderate Republicans.

Doing something

“It’s what you might call bipartisanship at gunpoint,” said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey. “Republicans have to do something. They can’t do nothing. It is clear that McConnell with all of the legerdemain of a veteran magician has not been able to put together 50.”

McConnell was forced to delay action on the measure last week after about half a dozen Republicans objected. He has spent the July 4 recess studying possible revisions that might win support of holdouts once he unveils a new plan as early as the week of July 17. Republican leaders have indicated they want to move on to other issues, including a Tax Code overhaul, if they can’t agree on a health bill before a month-long August break.

Senate Democratic leaders have said they would be willing to consider a measure that would bolster Obamacare’s troubled insurance exchanges, which have been buffeted by decisions by top insurers to exit the market in regions of Iowa, Missouri, North Dakota and many other states.

Democrats have accused President Donald Trump of injecting uncertainty in those markets by not providing clear support for Obamacare’s cost-sharing subsidies that help lower-income people buy individual coverage on the exchanges.

Schumer’s Response

Senate Minority Leader Chuck Schumer treated McConnell’s remarks as a breakthrough.

“As we’ve said time and time again, Democrats are eager to work with Republicans to stabilize the markets and improve the law,” Schumer said in a statement Thursday. “At the top of the list should be ensuring cost-sharing payments are permanent, which will protect health care for millions.”

Don Stewart, a spokesman for McConnell, said the reaction was overblown because McConnell had said last week after a White House meeting that Republicans may “have to sit down with Senator Schumer” on a pared-back bill if the GOP-only effort dies.

Since the House passed its version of an Obamacare replacement in May, Senate Republicans, including John Thune of South Dakota and Ron Johnson of Wisconsin, have said that they would seek a Plan B if the Republican bill stalls in their chamber. The effort to pass a Senate bill grew tougher after the nonpartisan Congressional Budget Office said last month that an initial proposal by McConnell would cause 22 million Americans to lose insurance by 2026.

There is already broad support among Republicans to shore up the exchanges, reflected in McConnell’s bill. It includes $50 billion over four years to bolster insurance markets, in addition to added cost-sharing subsidies. It also includes a state innovation pool of $62 billion over eight years that would allow funding for high-risk pools, reinsurance and other items.

Cruz Proposal

Republican leaders are weighing a proposal by Senator Ted Cruz, a Texas Republican, that could help lure his backing and that of other conservatives like Mike Lee of Utah. It would allow the sale of cheap, unregulated plans by insurers who also offer plans on the Obamacare exchanges that meet all of its requirements such as covering “essential health benefits” like maternity care.

Critics say that would give healthy people an incentive to leave the exchanges, pushing premiums dramatically higher for those who remain. Republican leaders are considering a companion exchange stabilization proposal to offset some of that potential effect, the GOP aide said.

Trump complicated McConnell’s negotiations with conservatives late last month, tweeting that if Republican senators can’t strike a deal, they should simply repeal Obamacare and replace it later. That’s a reversal of Trump’s earlier position and could give conservatives a reason to oppose McConnell’s bill.

Tougher yet is the public’s reaction to the Senate GOP plan. Just 12 percent of Americans support the Senate GOP Obamacare replacement, according to a June 24-27 poll of 1,000 registered voters by USA Today and the Suffolk University Poll. A full 53 percent of respondents said Congress should leave Obamacare alone or address its problems while leaving its framework intact.

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