The House on Wednesday rejected bipartisan legislation to exempt expatriates' insurance plans from the 2010 healthcare law.
The House voted 257-159 in favor of the bill, a clear majority. But Republicans called it up under a suspension of House rules, which requires a two-thirds majority vote.
The GOP indicated that the measure could be brought up again after the Easter recess.
"It's a shame Democrats brought down a common sense bill offered by a fellow Democrat. We'll reassess next steps when we get back," a GOP leadership aide said.
Under the measure, Americans who work abroad and receive coverage through expatriate insurance plans would be exempt from the healthcare law's individual and employer mandates. Business groups such as the Chamber of Commerce have endorsed the proposal.
Rep. John Carney (D-Del.), who sponsored the bill, said that forcing expatriates' plans to comply with the healthcare law would give an advantage to insurance companies in other countries. Carney has said the law would impose tax and paperwork burdens on providers of expatriate health insurance, burdens non-U.S. companies would not have to face.
"These foreign plans don't have to comply with the Affordable Care Act. Forcing U.S. expatriate insurance plans to comply with the Affordable Care Act gives their foreign competitors a distinct advantage," Carney said.
"It makes plans written in the U.S. more expensive, which gives companies an incentive to purchase foreign-based plans instead," Carney added.
Republicans said the measure offered an example of bipartisan compromise, a rare occurrence when it comes to ObamaCare. The House has had 50-plus votes to roll back or repeal the law — most of those have seen support from Republicans and a few dozen Democrats at most.
A few of these votes have been on bipartisan bills that have led to changes in the law. Other modifications to the health care overhaul include repealing some 1099 reporting requirements and the Community Living Assistance Services and Support (CLASS) program that was meant to provide long-term insurance.
"Sometimes, we can sit down with Democrats and Republicans not only in the House, but also in the Senate," said Rep. Devin Nunes (R-Calif.).
But while the bill was clearly more bipartisan than others, many Democrats still opposed the idea of giving some health plans an exemption from the law.
"We should not advance a deeply flawed bill because an insurance company is making threats," said Rep. Henry Waxman (D-Calif.), one of the healthcare law's key architects.
Some lawmakers also objected to the measure being brought up on short notice under an expedited process known as suspension of the rules.
"This has never had a hearing in the House," said Rep. Jim McDermott (D-Wash.). "No regular order whatsoever. This appeared out of nowhere."
The Obama administration has issued guidance that group health plans for individuals living outside the U.S. more than six months are exempt from the law's requirements through 2017.
— This story was updated at 6:48 p.m.