WASHINGTON (Reuters) - In a renewed attack against President Barack Obama's healthcare overhaul program, House Republicans voted on Tuesday to deny funding for a central element of the law that sets up marketplaces for people to shop for health insurance coverage.
The bill passed by the House of Representatives would rescind some $1.9 billion in grants that are being made available under the healthcare law to help states establish insurance exchanges where individuals and small businesses can shop for medical coverage plans.
The exchange idea is central to the law that has faced a number of challenges in Congress and the courts since it was enacted more than a year ago. Tuesday's bill, which passed on a largely party-line vote of 283-183, likely will be blocked by the Democratic-led Senate, just as an earlier effort by House Republicans to repeal the entire healthcare law was defeated.
Even though the bill targets insurance exchanges, the exchange idea is in fact a major element of a House Republican budget plan that would eventually end traditional government-run Medicare health plan and instead provide subsidies to private insurers to provide medical coverage for the elderly.
The Republican budget plan, drafted by Wisconsin Representative Paul Ryan, would have the elderly shop for subsidized medical coverage on insurance exchanges.
"House Republicans rhetorically exalt the private health insurance marketplace," said Ron Pollack head of Families USA, a healthcare advocacy group. "They ironically, however, plan to de-fund the creation of such state marketplaces that would enable consumers and small businesses to choose the private health plans they want."
The debate over the exchange bill covered familiar ground. Democrats argued the healthcare law already helps millions of people. Republicans argued that the law is costly and gives the federal government too big a role in setting coverage benefits.
"This is not a free-market system; it is essentially central planning," said Republican Representative Phil Roe.
Democratic Representative Frank Pallone said the effort to deny federal grants to the states would not kill the exchanges. Rather, it would make it harder for cash-strapped states to establish their own marketplaces and give more power to the federal government, Pallone said.
The healthcare law calls for the federal government to set up exchanges for states that fail to establish their own.
The nonpartisan Congressional Budget Office said the House bill would delay establishment of state exchanges and save $14.6 billion over the next 10 years mostly because fewer people would purchase government-subsidized insurance.
About 500,000 people would be without health coverage in 2015 because of the delay, CBO said in a recent analysis of the bill.
Additional reporting by Lisa Lambert; Editing by Philip Barbara