A group of four Senate conservatives issued a joint statement saying they are dissatisfied with the health care reform bill introduced by the leadership but did not rule out negotiations to change the bill more to their liking.

Senators Rand Paul, Mike Lee, Ted Cruz, and Ron Johnson probably hold the fate of the Senate Obamacare repeal-replace bill and staked out their own position on what needs to happen for them to get behind the effort.

The Hill:

"There are provisions in this draft that represent an improvement to our current healthcare system but it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their healthcare costs."

The early opposition of Senate conservatives is a blow to the bill but doesn't mean it's dead yet, even though Republicans control only 52 seats and can afford no more than two defections and still pass the measure.

Conservatives want to pressure Senate Majority Leader Mitch McConnell (R-Ky.) to revise the legislation and move it further to the right.

McConnell is also under pressure from GOP centrists, creating a difficult balancing act for the leader. Each move he makes to one of the two sides risks losing support from the other.

Of the four conservatives, Paul has long been seen as the least likely to end up voting for the bill. The other lawmakers have been seen as more likely to get to "yes,."

Sen. John Thune (S.D.), a member of leadership, said leaders would talk to the four senators about what would get them to yes. 

Paul, speaking only for himself, said the bill did not repeal enough of Obamacare, pointing to core elements of the GOP bill such as its tax credits and stabilization fund as "new entitlements."

He said now that leadership knows there are not 50 votes for the bill, he hopes a negotiation can begin. 

Paul also said it was not clear whether the four senators would stay united as talks continue.

"We have an agreement on the statement, let's see where it goes from there," he said.

Cruz, in a separate statement, emphasized the need to rein in Medicaid spending and lower premiums. He said he was encouraged by parts of the bill, but that more work needed to be done.

Senate majority leader Mitch McConnell has an impossible task, which is why he is very likely to fail.  Giving in too much to conservatives will lose him moderate votes.  Not giving into the right enough will lose him conservative votes.  Since his margin is so slim – just two senators would need to vote against the measure for it to fail – no one can see how McConnell gets to 50 votes at this point.

The major sticking point appears to be Medicaid.  The program was dysfunctional even before Obamacare was implemented and has only become less sustainable since then.  Obamacare expands Medicaid eligibility to include Americans who are 133% above the poverty line.  Washington will pay 90% of the extra costs for these Medicaid clients the first year and 80% every year after. 

Medicaid was a program originally designed as a health insurance program for the poorest of the poor.  States would manage the program, and Washington would help with some of the funding.  Like all entitlements, the program's costs ballooned as health care became more expensive.  As Medicaid became more costly, payments by the states to doctors, hospitals, and other health care providers dropped.  Obamacare has only exacerbated this problem, which has led to an unprecedented number of doctors refusing to take on new Medicaid patients and even dropping those they already service.

Conservatives want to kill Medicaid and let the states use money from block grants to fund health care for the poor.  But the immediate problem is getting rid of Obamacare's Medicaid expansion.  The Senate bill doesn't do that, and conservatives want a clear path to Medicaid phase-out before they will support any legislation.

So it is likely that if McConnell holds a vote, as he plans to do, by July 4 on the health care overhaul bill, it will fail.  Even if it passes, House conservatives will probably not go for the Senate version.  So the president's dream of getting an Obamacare repeal-replacement bill passed anytime soon is almost certainly on hold.