If you want policy, go elsewhere. Come here for the legislative wrangling. Here's the basic issue. This letter doesn't even have either Collins or Cassidy as cosignatories-- cosponsors of the main, moderate alternative in the Senate. Figure, then, that there are not four, but six Senators unhappy with the state of the House bill. That's plenty to sink any "repeal-and-replace" effort. The basic problem, as I have been saying all along, is that if you have to please the hardliners in the House, and anyone even remotely moderate in the Senate at the same time, that may not be possible. If Collins, Cassidy and the cosignatories of this letter can't agree to anything with significant cuts to the Medicaid expansion, and the hardliners in the House can't agree to anything that preserves the Medicaid expansion in anything like its current form, then the result is deadlock.
The irony, of course, is that deadlock reverts to the status quo, which is Obamacare, and only Susan Collins and the Republicans close to her (like maybe Murkowski) find that acceptable. Translation: the Republican hardliners in the House Freedom Caucus are being irrational.
This shouldn't be a surprise. They drove John Boehner from office. We have seen two truly brilliant Speakers in modern history, ironically back to back: John Boehner and Nancy Pelosi. Both were astonishingly effective, factoring in their circumstances. The difference is that Pelosi's caucus allowed her to get things done, whereas Boehner was constantly fighting the idiots in his own caucus.
Now, those same idiots, and a few new ones are working against their own policy preferences.