(Adds details on the vote and quotes from lawmakers)
By Mark Felsenthal and Susan Cornwell
WASHINGTON, Nov 15 (Reuters) - In the most significantlegislative rebuke to President Barack Obama's healthcareoverhaul, 39 members of his Democratic Party voted for aRepublican bill in the House of Representatives on Friday aimedat undermining his signature domestic policy.
The measure, which would allow insurance companies to renewand sell inexpensive, limited-coverage policies that have beencanceled because they don't meet the standards of the newhealthcare law that took effect on Oct. 1, passed 261-157.
The 39 Democrats who supported the bill - nearly one-fifthof the party's caucus - reflected the alarm that spread withinObama's party this week over the political damage from thebotched rollout of the Affordable Care Act, also known asObamacare.
Republicans have vowed to make Democratic support for thetroubled law the top issue in the 2014 elections. Twenty-nine ofthe 39 Democrats who voted for the Republican bill are runningfor re-election in competitive races, according to rankings bythe nonpartisan Cook Political Report.
Obama's approval ratings have plunged during the past sixweeks, as the rollout of the healthcare program that is his topdomestic achievement has been beset by technical glitches withthe federal online insurance website designed to allow consumersto shop for policies.
In recent days, HealthCare.gov's problems have beenovershadowed by reports that insurance companies were cancelingthe policies of millions of Americans whose policies did notmeet the new law's requirements that policies cover emergencytreatment, hospital stays and prescription drugs, among otherthings.
For years, Obama had promised that Americans would be ableto keep their policies if they liked them.
But the wave of cancellations has fueled the biggestpolitical crisis of Obama's presidency and led to anextraordinary scene at the White House on Thursday, as acontrite Obama took the blame for the healthcare program'sdismal start.
He said he believed that he had to win back the confidenceof the American people, and offered an administrative "fix" thatwould allow some people to retain their non-conforming insurancepolicies for at least a year.
Obama's plan dismayed some of his supporters who say thatthe cheap, limited-coverage plans that the new law aims to phaseout often give consumers a false sense of having meaningfulhealth coverage.
It also created concern in the insurance industry - whichfor years had planned the health insurance exchanges created byObamacare - and among state insurance commissioners.
Industry advocates warned that Obama effectively wastinkering with the delicate and complex funding behind thehealthcare law, and that premiums could begin soaring in 2015 ifmillions of consumers who were projected to be in Obamacare'shealth exchanges continued to hold limited-coverage policiesinstead.
Obama met with health insurance chief executives at theWhite House on Friday to discuss his proposal's potential impacton the insurance market.
"What we're going to be doing is brainstorming on how do wemake sure that everybody understands what their options are,"Obama told reporters in a brief photo opportunity as the meetingbegan. "We're going to be soliciting ideas from them."
'FRUSTRATED AND ANGERED'
Friday's bill, introduced by Republican Representative FredUpton of Michigan, represented the latest in a series oflegislative attacks on the healthcare law by the chamber, whichhas held more than 40 votes to limit or curtail Obamacare.
In touting his bill, Upton said that Obama "personallypromised that if people liked their current health care plan,they could keep it 'no matter what.' But cancellation noticesare now arriving in millions of mailboxes across the country.It's cancellation today, sticker shock tomorrow."
It is unlikely to pass the Democrat-controlled Senate, andthe White House has said Obama would veto the legislation if itreached his desk.
The House bill would allow people whose low-cost coveragewas canceled to keep those policies, and also would allowinsurers to continue selling policies that do not cover basicservices and offer little financial help for catastrophic healthevents.
Critics said the House bill would undermine Obamacare'sattempt to improve the healthcare system.
House Democratic opponents cast the vote as anotherRepublican effort to sabotage the healthcare law.
Republicans "are perfectly satisfied with 40 millionAmericans having no health insurance at all," saidRepresentative James McGovern, a Massachusetts Democrat. "If youwant to go back to a system where the insurance companies canturn people away because they are sick, by all means vote forthis bill."
But Representative Ron Barber, a Democrat from Arizona,summarized why he and 38 other Democrats voted for theRepublican bill.
"I am frustrated and angered by the continuing problems withthe healthcare website and I know Southern Arizonans arefrustrated and angry, too," Barber said.
"Today I voted to give people the option to keep theircurrent plan until these and other issues are resolved. That'sonly fair."
House Democrats were blocked in an effort to offer ascaled-down version of Upton's bill. (Additional reporting by Roberta Rampton and Caren Bohan;Editing by Doina Chiacu, Ross Colvin and Grant McCool)
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