President Barack Obama is set to veto a Republican-passed bill that gives people an exemption from penalties if they purchase health insurance through Obamacare co-ops, but then lose their plan because the co-op failed.

"These options are available to all consumers in these circumstances, not just those enrolled in coverage through co-ops," said the Office of Management and Budget on Tuesday, which issued a statement on the White House’s stance on the veto, and argued the measure was unnecessary.

The bill, sponsored by Rep. Adrian Smith (R-Nebraska) “would create a bad precedent for using exemptions from the individual-responsibility provision to address unrelated concerns about the Affordable Care Act,” the White House said.

The bill was intended to help enrollees of three nonprofit health insurers set up under Obamacare, known as co-ops, that have failed in the middle of this year, forcing people to find a new plan.

The OMB argued the bill would be a “step in the wrong direction” and weaken the “individual responsibility provision,” which in turn would “increase insurance premiums and decrease the number of Americans with coverage.”

Rep. Pat Tiberi, (R-Ohio), who chairs the Ways and Means Subcommittee on Health, said the problem has harmed nearly 22,000 people in his state who signed up with InHealth co-op.

"Thirty-one percent of American counties have one provider of health insurance, they don't have choices," he said earlier this month.

The OMB said the Obama administration had already reached out to people who lost their plans to help them transition to other plans. The agency also said people can qualify under the law for exemptions to the individual mandate penalties.

Since the introduction of Obamacare, the uninsured rate has hit 8.6 percent, an historic low, according to the most up-to-date government numbers, which translates to at least 21 million fewer people uninsured since the law passed in 2010.

Under the plan, the government requires most people to have health insurance, provides subsidies of billions of dollars in premiums, and imposes fines for those uninsured.

There are still 27 million people without health insurance, and the government estimated that half of them would be eligible for private coverage through insurance markets like Healthcare.gov, according to Associated Press.

The House will vote on the measure on Tuesday.