Seven Republicans joined all Democrats on Wednesday in a 45-55 vote defeating the plan. It was the second self-inflicted setback the GOP has suffered this week in trying to roll back Obama's 2010 statute. Conservatives have embraced the effort to repeal the law without an immediate replacement, but GOP moderates have worried it would anger voters nervous that Congress would fail to enact a replacement.
Late Tuesday, nine Republicans joined Democrats in blocking a proposal by Senate Majority Leader Mitch McConnell to dismantle Obama's law. It would have replaced it with eased coverage requirements for insurers, less generous federal healthcare subsidies, and other changes.
Doctors and a major health insurer group are criticising the latest GOP healthcare proposal in the Senate that will be voted on next.
The American Medical Association (AMA) said in a statement that it invites healthy people to opt out of the health insurance market, forcing premiums up for everyone else.
"Eliminating the mandate to obtain coverage only exacerbates the affordability problem that critics say they want to address," said the AMA.
That criticism was joined by the BlueCross BlueShield Association. The insurer group also said Congress has to provide money now to help stabilise shaky state markets for individual policies. Insurers want a guarantee that subsidies to help low-income people with their deductibles will continue.
President Trump has been pushing for Republicans to pass legislation repealing Obamacare. Earlier on Wednesday, he attacked a Republican senator who opposed moving forward with long-promised legislation to repeal and replace the healthcare reform.
Trump said on Twitter that Sen. Lisa Murkowski of Alaska "really let the Republicans, and our country, down yesterday. Too bad!"
Murkowski was one of two Republican women who on Tuesday voted against allowing debate about GOP legislation to repeal much of the Affordable Care Act. She also voted against a simple repeal.