A plan to repeal and replace Obamacare that Senate Republicans have been working on for months failed to get the 60 votes needed for approval Tuesday night.
The vote was 43 in favor and 57 against. Nine Republicans voted against the measure.
The plan would have made deep cuts to Medicaid, the health insurance program for the poor, and reduced Obamacare subsidies to lower-income people to help them defray the cost of health insurance.
It was the first of many expected votes this week on repealing or replacing elements of President Barack Obama’s signature healthcare law.
Prior attempts to replace Obamacare have collapsed in recent weeks due to divisions in the Republican party.
President Donald Trump had made scrapping the policy a key campaign pledge.
On Tuesday night, the Senate began the debate-and-vote process which is expected to last a number of days.
Nine Republicans voted against the first amendment – to repeal and replace Obamacare – and it failed to pass.
Earlier, Mr Trump had warned his party’s senators of the repercussions of not pushing through the measures to repeal and replace Obamacare, known formally as the Affordable Care Act.
The Republican party, which needed a majority for the motion to go ahead, secured 51 votes after Vice-President Mike Pence cast a tie-breaker in support of the legislation.
Senator John McCain, who was recently diagnosed with an aggressive brain tumour, received a standing ovation as he returned to Congress to cast his “Yes” vote.
President Trump tweeted his thanks to the Arizona senator for playing “such a vital role” in the vote.
“Congrats to all Rep. We can now deliver grt [great] healthcare to all Americans,” he wrote.
What happens next?
It remains unclear what measure senators will now debate and vote on.
There appear to be two choices – either a repeal-and-replace bill that has already struggled to win support across the party, or a bill that enacts repeal with a two-year delay, in the hope of finding agreement before that time elapses.
But senators have also considered a “skinny bill”, a far narrower measure that would scale back some of the more controversial elements in an effort to get a wider consensus.
What have Republicans proposed?
Republicans have long railed against Obamacare as government overreach, criticising the system for introducing government-run marketplaces, where premiums have risen sharply for some people.
The party’s proposed alternative includes steep cuts to Medicaid, a healthcare programme for the poor and disabled.
And it removes Obamacare’s individual mandate requiring all Americans to have health insurance or pay a tax penalty.
About 20 million people gained health insurance under former President Obama’s Affordable Care Act.
The non-partisan Congressional Budgetary Office (CBO) found the bill would strip 22 million Americans of health insurance over the next decade.
If Republican senators elect to repeal key provisions of the law without immediately replacing it, the CBO estimates about 32 million consumers would lose insurance over the next 10 years.