Sens Ted Cruz (left) and Mike Lee, who were part of the Senate's health care working group, have been pushing their colleagues privately to adopt a proposal to largely gut Obamacare's regulatory regime. | Getty Right threatens McConnell's Obamacare repeal

Conservative groups are aggressively backing Sens. Mike Lee and Ted Cruz in their bid to move the Senate Republicans' Obamacare repeal bill further to the right, setting up a major confrontation between the party’s warring factions next week.

On Wednesday afternoon both FreedomWorks and the Club for Growth urged Senate Majority Leader Mitch McConnell (R-Ky.) to adopt an amendment fromCruz of Texas and Lee of Utah that would largely gut Obamacare’s regulatory regime. The move is significant: Without at least a neutral stance from conservative groups, it could be impossible for McConnell to find the 50 votes needed to pass a repeal this month. But what the right is asking for may not be able to pass the Senate either.


Cruz and Lee’s Consumer Freedom Act would allow the sale of noncompliant healthcare plans as long as insurers offered plans that also covered pre-existing conditions and other terms mandated by the Affordable Care Act. Lee and Cruz, who were part of the Senate's health care working group, have been pushing their colleagues privately to adopt the language, arguing they should at least allow consumers to buy cheap plans if they can’t repeal the law entirely.

“Congress should not stand in the way of allowing Americans who want to opt out of Obamacare to do so,” said Club for Growth President David McIntosh.

“If Senate Republicans insist on tweaking Obamacare, we urge them to adopt language being pushed by Sens. Cruz and Lee that will provide consumers with more choice and truly affordable health insurance coverage,” said FreedomWorks President Adam Brandon.

Heritage Action, a third major group on the right, has been more reserved in its criticisms of the bill.

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Republicans are locked in a vicious internal fight over how to handle the late push by the conservative senators and outside groups. They cannot pass the bill without Lee and Cruz’s support given that Sen. Rand Paul (R-Ky.) is also balking, but if they include the language being sought by the right they risk a major rebellion in the party’s center.

The majority of Republicans in the caucus are uncomfortable touching the pre-existing condition language in the Senate bill, GOP insiders say. Sen. Lamar Alexander of Tennessee is speaking against it in caucus lunches and Sen. Deb Fischer of Nebraska, a staunch conservative, also vocally opposes Lee and Cruz’s idea. Many senators believe that the House made a critical error by allowing states to opt out of pre-existing condition protections and are determined not to touch that part of Obamacare.

Yet White House legislative affairs director Marc Short endorsed the idea on Sunday, saying that the White House supports Lee and Cruz’s effort and they “think that it’s perfectly appropriate, [their] amendment.”

Cruz and Lee’s amendment would allow people to buy cheaper plans, but it could result in most sick people buying into the separate pool of plans governed by Obamacare's regulations. Many Senate Republicans worry the proposal could could roil already unstable insurance markets — one of the very problems the GOP is trying to solve.

This week, the Congressional Budget Office is assessing how Cruz and Lee’s proposal affects coverage and premium numbers. American Action Forum president and former CBO Director Douglas Holtz-Eakin said that it’s unlikely to score well with CBO and could lead to major deterioration in insurance markets.

“There’s a virtue to flexibility in insurance design, but there’s no virtue to splitting risk pool,” Holtz-Eakin said in an interview late last week. “It just doesn’t sound like it would work out very well.”

McIntosh also drew a line against a proposal sought by a growing number of Republicans that would retain taxes on the rich and plow that money back into helping people afford health insurance. Sought by deal-makers like Sen. Bob Corker of Tennessee, that proposal could raise tens of billions of dollars for funding low-income peoples’ premiums and blunt an attack from Democrats that the GOP bill is simply a tax cut for the rich funded by benefit cuts for the poor.

But McIntosh said that leaving the Net Investment Tax in place would mean the bill “suppresses economic growth and opportunity throughout our nation.”

And both Brandon and McIntosh, as well as a handful of conservative senators, have said if there’s no deal on health care forthcoming, they should repeal Obamacare now and forge a replacement separately.

“If Majority Leader Mitch McConnell is unable to salvage the ‘Better Care Reconciliation’ bill, then the next best option would be to pass a real repeal bill,” McIntosh said. “The American people are tired of a Congress that overpromises and underdelivers.”