U.S. Rep. Diane Black

The measure was introduced in July to close what Black described as a “loophole” that could have allowed some middle-class Americans who earn up to $60,000 a year to qualify for Medicaid benefits and health exchange subsidies when the health care bill is fully implemented in 2014.

“Thanks to the loophole in the law, individuals whose incomes are up to 400 percent of the federal poverty level could qualify for Medicaid,” Black said.

Unlike most federally subsidized programs, the health care bill did not include a provision to count Social Security benefits as income.

Instead, a new formula was enacted, called the Modified Adjusted Gross Income, for calculating salary levels to determine Medicaid eligibility.

“Bringing Medicaid back into line with all the other major public assistance programs is of great urgency,” Black said. “The MAGI policy change has not yet taken effect, so there is time to prevent these improper payments before taxpayer dollars are spent.”

The bill passed by a 262-157 vote with the support of 27 Democrats, including Rep. Jim Cooper of Nashville. Much to the chagrin of many in the Democratic Party, the Obama administration released a statement Tuesday in support of its passage as well.

“This provision was not a glitch,” said Rep. Joseph Crowley, a Democrat from New York. “It was written into the law deliberately, and anyone who would have read the bill would have known that. I don’t care if the president is going to sign this bill. It doesn’t make sense.”

Several Democratic representatives argued the bill would negatively impact too many retirees and disabled individuals.

The Congressional Budget Office estimated that although it would reduce deficit spending by $13 billion, between 500,000 and one million people would lose health insurance coverage as a result of the bill.

“Those losing Medicaid coverage include some retirees between the ages of 62 and 64, as well as some people receiving survivor benefits, disability benefits and other Social Security benefits,” according to the CBO report. “Those (who lose) coverage would be expected to enroll in qualified health plans offered in health insurance exchanges, obtain employment-based insurance, or become uninsured.”

Some Democrats also expressed disapproval because the savings from that bill were used to offset the loss of revenue from another measure, a repeal of the 3 percent withholding tax placed on companies that contract with the government.

The repeal of the withholding tax passed by a 405-16 vote.

“Republicans want to pay for the 3 percent bill by making it harder for retirees to get health insurance,” said Rep. Alcee Hastings of Florida. “This is, yet again, an inappropriate use of our tax code.”

However, Black dismissed the notion it unfairly targeted certain groups.

“It is incorrect to assert that this legislation unfairly targets widows, survivors and the disabled,” she said. “This is equivalent to asserting that the public housing or (supplemental nutrition assistance) programs are unfairly targeted to widows, survivors and disabled simply because, when accounting for the resource programs, they consider the source of income.”

After the bill passed Thursday, Black touted its passage as proof of House Republicans working to trim unnecessary spending at a time when Congress should be working to reduce the deficit.

“As a nurse for over 40 years, I strongly believe that we must ensure Medicaid’s scarce resources are used for those in the most need,” she said. “By passing my bill, we will save $13 billion over 10 years, without taking away any benefits for those who currently rely on Medicaid.”

Both bills have been sent to the U.S. Senate, where Black’s bill is likely to face more hurdles in the Democratically controlled chamber. If passed, Obama has said he will sign the Medicaid bill into law.