The plan by Sens. Bill Cassidy of Louisiana and Susan Collins of Maine would retreat from years of GOP cries to repeal Obama's law and replace it with a still undefined Republican alternative.
It comes as GOP lawmakers face pressure from President Donald Trump to quickly void and replace the health law and as Republicans continue hunting for a proposal that would unite them.
"It has been a Republican principle that power is best held by individuals and states, not the federal government," Cassidy told reporters.
But Trump and congressional GOP leaders have not suggested letting states retain the entire statute. Such a proposal could dismay conservative voters who for years have viewed Republican calls to repeal the law as a top-tier promise and goal.
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Cassidy said he's discussed the proposal with Senate Majority Leader Mitch McConnell, R-Ky., who he said is "waiting to see how this plays out."
Cassidy described the senators' proposal as a way to help Republicans overcome a key obstacle: To enact a full replacement for Obama's law, they will need 60 Senate votes in a chamber they control by just 52-48.
Collins said the bill is still being written but would protect families and give insurers time to transition to new programs. She said if Republicans don't advance legislation and start the health care debate, "Then we will fail the American people."
Senate Minority Leader Chuck Schumer, D-N.Y., said the GOP measure would reduce care and drive up medical costs for consumers.
"Ultimately, this proposal is an empty facade that would create chaos not care for millions of Americans," he said.
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