Members of the US House of Representatives voted 219 to 212 to back the controversial plan on Sunday night, meaning it will be sent to President Barack Obama, to sign it into law.
As the bill cleared the 216-vote threshold needed to ensure its passage, Democrats erupted in applause and cheering.
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President Obama, who has staked his effectiveness and political legacy on healthcare reform, is expected to make a televised statement on the issue shortly.
Democrats used their majority to muscle the measure through, losing 34 conservative party members who joined the united Republican opposition, worried about paying a political price in November mid-term elections.
The House vote on what Mr Obama has called "the toughest insurance reforms in history" came a century after president Theodore Roosevelt called for a national approach to US healthcare.
Compromise plan
Obama's plan, a compromise between rival House and Senate versions of the bill passed last year, would bring the world's richest country closer than ever in its history to guaranteeing healthcare to all its citizens.
Using a blend of expanded government health programs and subsidies for millions to buy private insurance, the bill would add some 32 million Americans to the ranks of those covered - meaning 95 per cent of Americans will be covered.
It will ban insurance company practices like denying care for preexisting conditions, imposing lifetime caps on coverage, while providing subsidies to buy private insurance in newly-created marketplaces called "exchanges".
"This bill is complicated, but it's also very simple: Illness and infirmity are universal, and we are stronger against them together than we are alone," Democratic House Majority Leader Steny Hoyer said before the vote.
But Republicans denounced the plan, and made frequent trips to a Capitol balcony to cheer on hundreds of protesters outside demanding they "kill the bill" and warning "in November, we'll remember".
Eleventh hour deal
"This trillion-dollar overhaul will take the America we know and love in the wrong direction," said Representative Eric Cantor, the number two House Republican.
Lawmakers are expected to move quickly to pass a package of changes sought by Mr Obama.
The vote came after an 11th hour deal with pro-life Democrats concerned that the bill would allow government funding for abortions.
After days of hard-fought negotiations, Obama pledged to sign an executive order reaffirming a longstanding US ban on funding for abortions, winning key support for the bill.
"I've always supported health care reform," said the group's leader, Democratic Representative Bart Stupak, flanked by other anti-abortion lawmakers.
