Senate Majority Leader Mitch McConnell signaled Thursday that Congress will have to prop up Obamacare’s ailing markets if Republicans cannot smooth over their differences and pass a plan to scrap the 2010 law.

His remarks to a Rotary Club luncheon in Kentucky were an implicit signal to his troops that if their 52-seat majority can’t rally around a fast-track bill, the alternative is to work with Democrats to patch up the law they’ve railed against for seven years.

“If my side is unable to agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur,” Mr. McConnell said, according to an Associated Press report.

Senate Minority Leader Charles E. Schumer swiftly interpreted the remarks as an invitation to Democrats, who have said they will only help out if the GOP agrees that Obamacare is here to stay.

“It’s encouraging that Sen. McConnell today acknowledged that the issues with the exchanges are fixable, and opened the door to bipartisan solutions to improve our health care system,” said Mr. Schumer, New York Democrat.

For weeks, Mr. McConnell has struggled to pin down 50 votes from his 52-seat majority for the plan he wrote in secret.

He’s caught between conservatives who want to gut more of Obamacare and moderates who say the plan would harm their states, particularly by slashing federal spending on Medicaid.

But Mr. McConnell isn’t giving up just yet, as Republicans wait for the Congressional Budget Office to score revised legislation so they can resume the debate after the Independence Day recess.

The CBO is vetting an amendment by Sen. Ted Cruz, Texas Republican, that would let insurers offer plans that do not comply with Obamacare’s coverage regulations so long as they offer at least one plan that does.

Conservatives say allowing consumers to buy the type of coverage they want is the best way to drive down premiums, though opponents say consumers will pay less for skimpier benefits, while those who still want or need the type of robust coverage mandated by Obamacare will have to pay more.

Mr. Schumer, New York Democrat, blasted the idea as a “hoax” on Thursday. He said those who said sicker Americans would be segmented to a pool with ever-rising costs, since healthier people will gravitate toward the cheaper, bare-bones plans.

“Americans with pre-existing conditions will almost certainly be left without access to affordable and quality health care, making this even worse than the House bill on this issue,” Mr. Schumer said.

“The only way to truly improve our nation’s health care system is for the Trump administration to stop sabotaging the marketplaces and for Republicans to finally heed Democrats’ requests to come together and work in a bipartisan way,” he said.

Conservatives, though, are warming to Mr. Cruz’s idea, saying if Republicans refuse to deliver an outright real bill, it would be the next best thing.

Moderate Republicans might balk at the plan, however, after promising not to touch protections for people with pre-existing conditions — especially if the CBO comes back with an ugly score. That means a plan that would win over conservatives like Sen. Mike Lee, Utah Republican, could scare off other Republicans at the same time.

The Cruz proposal could also be costly, since giving healthier people an off-ramp from the Obamacare markets “effectively turns the exchange into a high-risk pool,” said Douglas Holtz-Eakin, president of the American Action Forum and former CBO director.

“High-risk pools are expensive,” he said.

Many Senate Republicans have been laying low over the Independence Day break, though ones who made public appearances have been hearing from opponents of the GOP plan.

Sen. Susan Collins, Maine Republican and key holdout, told The Washington Post there was “only one issue” on constituents’ minds — health care — as she walked in a July 4 parade near the Canadian border. Spectators offered her encouragement for standing against the GOP plan in its current form.

Sen Jerry Moran, Kansas Republican who said he opposed the health bill as drafted after Mr. McConnell postponed a floor vote last week, doubled down during a town hall deep in rural Trump country back home, according to press reports.

Some protesters defended Planned Parenthood, which would be defunded under the GOP bill, during the session in the small town of Palco, while others touted a government-run, single-payer system.

Sen. John Hoeven, North Dakota Republican, became the latest GOP senator to reject the Senate bill as written, telling hospital executives in Grand Forks on Wednesday that he “doesn’t support the bill as it stands,” according to the Bismarck Tribune.

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