Sen. Lindsey Graham's bill is intended to appeal to Republicans as a replacement plan for Obamacare, while he hopes to sell the effort to Democrats as a repair plan. | Pablo Martinez Monsivais/AP Photo Graham introduces repeal back-up plan

A new health care proposal from GOP Sen. Lindsey Graham that would direct much of Obamacare's federal funding directly to the states could offer a starting point for Congress if the Senate GOP effort fails next week, according to a summary of the bill obtained by POLITICO.

The bill from Graham is intended to appeal to Republicans as a replacement plan for Obamacare, while he hopes to sell the effort to Democrats as a repair plan. It would keep all of Obamacare's taxes except for the Medical device tax but block grants about $110 billion in federal health care funding to the states. It is not intended to compete with Senate Majority Leader Mitch McConnell's plan, a Republican aide said, but likely will be offered as an amendment to the bill next week to test its support.


"Instead of having a one-size-fits-all solution from Washington, we should return dollars back to the states to address each individual state’s health care needs. Just like no two patients are the same, no two states’ health care needs are the same. A solution that works in California may not work in Virginia," Graham said of the bill. “These funds are already being spent on Obamacare, but instead of having Washington decide, we’ll empower each individual state to choose the path that works best for them."

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Graham has been working with Sen. Bill Cassidy (R-La.) on the proposal. Cassidy and Sen. Susan Collins (R-Maine) introduced a bill earlier this year that would allow states to keep Obamacare if it's working for them or reform the law if they oppose it, and Graham's bill takes a similar approach in some areas.

The bill would end Obamacare's individual and employer mandates for insurance but retain its protections for people with pre-existing conditions. The billions in federal funds that would be redistributed to the states would be restricted to health care use.

