Two Republican senators are pitching an Affordable Care Act replacement that they hope will appeal to the law’s supporters.

States that like Obamacare, they argue, should get to keep it.

Sens. Bill Cassidy (R-LA) and Susan Collins (R-ME) held a press conference Monday to roll out the Patient Freedom Act. They propose giving states three options: Keep Obamacare, switch to a different insurance expansion, or go forward with no coverage expansion at all.

“California and New York, you like Obamacare, you should keep it,” Cassidy said at the press conference. “It’s not for us to dictate.”

The Cassidy-Collins proposal is a sharp departure from the plans offered by House and Senate leadership, which would not let Obamacare continue in any form. Cassidy argues that this is a middle-way approach that might bridge Democrats and Republicans’ sharp divisions over Obamacare.

“At some point in this process, we will need a bill that can get to 60 votes,” Cassidy says. “Now you can say to a blue-state senator who is invested in supporting Obamacare, ‘You can keep it, but why force it on us?’”

The Cassidy-Collins proposal is a compromise, one that could preserve the Affordable Care Act in some places while letting other states try something new. Problem is, neither political party is in the mood for compromise when it comes to Obamacare.

Democrats have quickly blasted the proposal, which could lead to coverage declines in places that oppose the health care law. Senate Minority Leader Chuck Schumer (D-NY) described it as “an empty facade that would create chaos.” Republican leadership, meanwhile, has been conspicuously quiet on the bill, suggesting little interest in making this the party line.

The Cassidy-Collins proposal, explained

The Patient Freedom Act would, as described by Sens. Cassidy and Collins, give states three options:

Continue to run the Affordable Care Act as is without any changes Switch to a different health insurance expansion that emphasizes auto-enrolling all uninsured residents into a federally subsidized catastrophic plan Offer no coverage expansion at all, and the state would lose the money it currently receives for insurance subsidies and Medicaid expansion

Options one and three are relatively straightforward: You continue Obamacare, or you don’t.

But option two is the biggest unknown, and what most of the press conference focused on — the one the senators expect lots of conservative states would adopt. “I believe most states would embrace this option, which allows states to cover the uninsured by providing a standard plan that has a high-deductible, basic pharmaceutical coverage, some preventive care and free immunizations,” Collins said.

There are lots of details still missing from the Cassidy-Collins plan, which only exists as a one-page background document. There is no legislative language at this point. But from the press conference and the background document, here’s what we know.

Redistribute premium subsidies, Medicaid expansion to create a universal tax credit

For option two, Cassidy and Collins propose adding up all the money a state would get from the health care law’s private insurance subsidies and Medicaid expansion (even if a state has not expanded Medicaid, it would still get the funds). That money would get divided up on a per-person basis to people who purchase their own health coverage. States would also have the option of leaving Medicaid expansion in place and just divvying up their premium subsidy dollars.

The tax credits that Cassidy has previously worked on have allowed for variation based on age and geography, but not income. This would be very different from the Affordable Care Act, where people who earn less get more generous subsidies to put toward insurance coverage.

Cassidy confirmed at the press conference that tax credits would be distributed on a per-person basis that was agnostic to income. Under this approach, anyone up through Bill Gates would qualify for help, so long as he or she does not have an offer of insurance at work.

Economist John Goodman, who helped Cassidy with the plan, argues that this would make the program much easier to administer and that “if there is an income or asset test, enrollment becomes burdensome and complicated.”

That may be true, but it also means the lowest-income Americans could have a lot to lose in a plan like Cassidy-Collins.

Automatically enroll the uninsured into a low-premium, catastrophic plan

Cassidy-Collins gives states the opportunity to create a default catastrophic health insurance plan with low premiums and a high deductible into which states could automatically enroll uninsured residents. The premiums would theoretically be low enough to have the tax credit cover the entire bill.

“All those young immortals who are not about to pay through the nose on the exchanges will be automatically signed up,” Cassidy told me in an interview a few months ago, about a similar proposal of his from 2015. “You restore some of the actuarial soundness to the market.”

States that go down this path would no longer have an individual mandate — and automatic enrollment would be meant to take its place. People would have to actively opt out of insurance rather than proactively sign up. The exact logistics of administering this type of program haven’t been sorted out yet.

Cassidy said at his press conference today that states would also use the tax credits to pre-fund health savings accounts, which individuals could draw from to pay medical bills while they’re still within their deductibles. There would still be some gap, however, between when the HSA dollars ran out and the catastrophic coverage kicked in.

How big this gap would be — or even how big the subsidy would be — is not clear at all, and a big question mark around this plan. Cassidy and Collins made clear it would be big enough to cover a catastrophic health insurance plan, which suggests it will need to be somewhere in the thousands (or perhaps tens of thousands for older Americans). Conversely, if they don’t have that funding, they may need to make the plan less generous in order to get the premiums down to match the size of the tax credit.

The size of the tax credit — how much it covers before enrollees fall into the gap between HSA and coverage — would likely matter a lot to those enrolling in coverage. The biggest frustration that Obamacare enrollees have with their plans right now is that the deductibles feel unaffordable. If the gap between the HSA contributions and the catastrophic coverage is really large, that might exacerbate such complaints.

Cassidy-Collins is a compromise bill at a moment when no one wants compromise

One of the things that makes Cassidy-Collins work policy-wise — and makes it distinct from other Republican proposals — is that it does not take aim at the new taxes and fees in the health care law. It leaves all of that in place, so that the government has a way to fund the states that continue Obamacare and pay for a coverage expansion in places that don’t.

But this exact feature is what makes Cassidy-Collins not work so well politically. Republicans have been adamant that they need to dismantle the health care law’s taxes and fees. This was the focus of President Trump’s executive order on Friday, and of much Republican rhetoric around the health care law.

Cassidy admits that his bill does need more revenue than other Republican plans; that’s implicit in expanding coverage to millions of people. “The revenue is essential,” he says. He argues that the pay-fors could change at some point in the future, which his party may find more palatable.

Democrats, meanwhile, were not won over by the Cassidy-Collins plan. I reached out to about a half-dozen Senate Democrats’ offices Monday afternoon and got a universally negative reception. Nobody liked the idea of giving some states the option to dismantle the health care law and replace it with something else — or potentially nothing at all. The fact that some states could simply end the coverage expansion is, according to one Democratic Senate aide, “a nonstarter.”

Still, I think this proposal will be important to keep an eye on. Rep. Tom Price (R-GA) brought up a similar idea when he highlighted the bipartisan legislation he worked on in 2006 that “empowered states to come up with new ideas to provide health care coverage to their uninsured populations.” Republicans, meanwhile, will continue to court Sen. Collins’s vote as she has voiced concerns about passing a repeal plan without a replacement. And now she has made it quite clear what type of replacement she wants.

Watch: Republicans have one major problem on Obamacare