The U.S. House of Representatives voted to eliminate $1.9 billion in grant funding for state-based health insurance exchanges in the face of a veto threat from President Barack Obama . The 238-183 vote the evening of May 3 sends HR 1213 to the Senate, where it will run up against a Democratic majority.

The legislation would cut off funding to assist states in establishing their exchanges, as designated by the Affordable Care Act — what the bill’s sponsor, The bill’s sponsor, House Energy and Commerce Chairman Fred Upton , called a “slush fund.” It would void direct appropriations and rescind unobligated funds.

“This bill is part of our effort to restore fiscal accountability to the federal government. In a rush to ram through health care reform, Congress gave the Secretary of Health and Human Services a blank check with unprecedented new authority,” Upton, R-Mich., said.

The program provides essential funds for nearly all states — including many which are suing to overturn the law — to design their own exchange systems, Democrats cautioned. Grant funds have been awarded to finance information technology infrastructure, rate review systems and other preparations. In states such as Louisiana that have declined funding and announced their intentions to pass on forming exchanges, the health reform act gives HHS the authority to establish one.

“To pull the funding for the state’s health exchanges is irresponsible at a time when so many citizens are depending on these health reforms to open doors to coverage that have previously been closed to them. The nation’s health care system will remain challenged if the state’s are prevented from creating the tools needed to expand access to meaningful health coverage for their residents,” Maryland Acting Insurance Commissioner Beth Sammis said in a statement.

If it becomes law, HR 1213 would cut off the flow of $1.9 billion in planning grants to states, according to the nonpartisan Congressional Budget Office. The legislation would likely delay the establishment of exchanges and by extension, new insurance coverages and federal spending, the CBO determined. Over 10 years, the CBO said, it would reduce direct federal spending by a net $14.4 billion.

The Obama administration reiterated its willingness to revise aspects of the Affordable Care Act. However, advisers will recommend that the president veto this bill if it arrives on his desk, according to a policy statement from the Office of Management and Budget.

“Rather than making refinements to improve the law, H.R. 1213 simply proposes to eliminate funding. It would not advance the key objectives of the Affordable Care Act or offer alternative solutions for meeting these important objectives, and the bill may make it harder to achieve better and more affordable care,” the administration statement said.

The exchanges for small groups and individuals are not scheduled to launch until 2014, but HHS will determine state plans’ fitness for compliance with the ACA in early 2013.