Democrats on the Senate Finance Committee defeated a Republican amendment to a healthcare bill that would require legal immigrants to wait five years before accessing federal health benefits.

Senate Minority Whip Jon Kyl (R-Ariz.) proposed the amendment, arguing that instituting such a limit would discourage people from coming to the United States to access government programs.

But Democrats argued that a five-year waiting period would be unfair to immigrants legally residing in the United States and paying taxes. Moreover, Sen. Bob Menendez (D-N.J.) argued, it would run counter to the bill's requirement that nearly everyone obtain health insurance or face a financial penalty. "This amendment sets up a Catch 22 for legal immigrants," Menendez said.

Under current law, legal immigrants must wait five years before they can receive Medicaid benefits. Earlier this year, Congress passed legislation lifting that restriction for the Children's Health Insurance Program.

The Baucus bill would prohibit illegal immigrants from receiving tax credits for health insurance and from buying plans on the health insurance exchange.

On Wednesday, the Finance Committee voted down an amendment sponsored by ranking member Chuck Grassley (R-Iowa) that would have required photo identification for health benefits applicants. The bill already requires people to verify their names, places of birth and Social Security numbers.