The Senate has blocked the first amendment to the bill to replace and repeal Obamacare.
Nine Republicans crossed party lines and voted against it.
The wide-ranging proposal by Majority Leader Mitch McConnell erased the law's tax penalties on people not buying insurance, and made cuts to Medicaid.
This came hours after the Senate voted to proceed with the debate on the Republican bill.
The vote was 51-50 after Vice President Mike Pence cast the tiebreaking vote.
Senator John McCain delivered a crucial vote in his first trip to the Senate floor since being diagnosed with brain cancer.
"I want to thank Senator John McCain, very brave man. He made a tough trip to get here and vote, so we want to thank Senator McCain and all of the Republicans. We passed it without one Democrat vote," said President Donald Trump.
"Let’s trust each other. Let's return to regular order," McCain said. "We've been spinning our wheels on too many important issues because we keep trying to find a way to win without help from across the aisle."
Meanwhile, Trump held a campaign-style rally, where he celebrated the vote to proceed.
He told the crowd we're now one step closer to ending what he calls the Obamacare nightmare.