House passes de-funding healthcare bill

The House voted Tuesday to eliminate federal grant money intended to help states establish their own insurance exchanges. The measure passed 238-183 after Republicans dismissed complaints that the bill would tie states' hands and shift power to the federal government.

Rep. Frank Pallone (D-N.J.) said de-funding the exchange grants would reduce states' ability to create exchanges tailored to their own needs. The federal government can run a fallback exchange in any state that does not establish its own.

"It's the exact opposite of what you're saying you want to do," Pallone said of the de-funding bill during Tuesday's floor debate.

Rep. Michael Burgess (R-Texas) argued that even if states receive planning grants and authorize their own exchanges, they don't truly have flexibility over how to structure the new insurance marketplaces. The reform law sets criteria that every exchange, state-run or otherwise, must meet. States aren't free to set up their own exchanges unless they can explore options outside of those mandates, Burgess said.

Pallone offered an amendment to require a Government Accountability Office study into the benefits of state-run versus federal exchanges. It failed, as did all of the amendments to the de-funding proposal.

Five Democrats crossed party lines to vote for the final bill: Reps. Jason Altmire (Pa.), Dan Boren (Okla.), Luis Gutierrez (Ill.), Tim Holden (Pa.) and Mike McIntyre (N.C.).

The House postponed a vote on a separate bill that would cut the healthcare law's funding for school-based health clinics. The Congressional Budget Office estimated that the cuts would save the government roughly $100 million over the next decade. The exchange de-funding measure would save $14 billion over the same period, CBO said.