By Lauren Fox

CNN

WASHINGTON (CNN) -- Republican senators are likely to keep a key Obamacare provision intended for people with pre-existing conditions as they craft their bill to repeal and replace the Affordable Care Act.

The move, however, could infuriate conservatives in their own ranks and set up a showdown with the House of Representatives, perhaps endangering the entire repeal effort.

Senate Majority Leader Mitch McConnell says a vote is possible by July 4.

According to Senate GOP aides familiar with negotiations, Republican leaders don't want to let states opt out of what is known as community rating -- a provision that blocks insurance companies from charging people more based on their medical history. It's one of the most popular aspects of Obamacare.

Senators, however, are still expected to allow states to waive Obamacare's essential health benefits mandate, which requires insurers to cover key medical services like prescription drugs, maternity and mental health care.

The House GOP bill would permit states to opt out of both provisions, sparking harsh criticism that Republicans are backtracking on their promise to protect people with pre-existing conditions. Under the House bill passed last month, insurers in states that waived community rating could charge more to those with pre-existing conditions if they let their coverage lapse.

By keeping the community rating protection, Senate Republicans may be trying to dampen some of that anger, but the move could make their internal fight for 51 votes even harder. Majority Leader Mitch McConnell can only afford to lose three members of his conference and still overhaul the American health care system. If three members back out? The Senate's effort to repeal Obamacare is over.

Keeping the community rating provision isn't expected to sit well with conservatives who have argued that Republicans need to repeal as many Obamacare regulations as possible in order to lower premiums. Instead of giving states the chance to opt out of regulations,conservative Utah Sen. Mike Lee had even advocated that states dead set on complying with Obamacare mandates should have to opt in to them.

But the Senate bill could face other issues across Capitol Hill if the chamber's leaders keep community rating.

Barring states from being able to repeal as many regulations as the House bill does would be a problem down the line if the Senate and House must reconcile their two bills.

Giving states the opportunity to repeal community rating ultimately brought dozens of members of the conservative House Freedom Caucus to support the GOP's American Health Care Act. Without it, the chances of passing a health care bill out of the House again would be in jeopardy.

Ultimately, Senate Republicans have few good political choices ahead of them. If they allow states to opt out of the community rating provision, it fuels Democratic attacks that Republicans are gutting protections for people with pre-existing conditions, something that even President Donald Trump promised he wouldn't do. If they keep the protection, Senate Republicans risk losing conservative members in their own ranks.

Also, by allowing states to opt out of the essential health benefits mandate, Senate Republicans continue to leave themselves vulnerable to criticism that they are hurting those with health issues. Without that provision, insurers could offer skimpier policies that don't include the treatments that those with medical issues need. So these Americans could find themselves having to pay for these services themselves.

CNN's Tami Luhby contributed to this report.