Las Vegas Sun

March 28, 2024

Lawmakers fight over paying for repeal of health care reporting provision

Shelley Berkley

Shelley Berkley

Dean Heller

Dean Heller

Joe Heck

Joe Heck

John Ensign

John Ensign

Harry Reid

Harry Reid

As of this afternoon, every serving member of the Nevada delegation has availed themselves of the opportunity to vote for a repeal of the cumbersome 1099 reporting requirements under the health care law.

And that outpouring of bipartisan support has created one giant mess.

Everyone in Washington agrees that the provision of the health care law that requires health care providers to report any transaction worth $600 or more to the Internal Revenue Service — a requirement that providers complain would monstrously overburden them with administrative costs — is a mistake that’s gotta go.

But alleviating the cost to health care providers wallops the federal government with a $19 billion gap that any fix to the law has to fill.

That’s precipitating a war of principles vs. pragmatism that also has Nevada lawmakers pitted against each other — and sometimes against themselves — as they back bills that don’t match up enough to end the protracted argument over 1099 reform.

Over in the House, Republicans Dean Heller and Joe Heck voted today to support a plan that would cover the health costs mostly with health care subsidies. Under the health care law, families below 400 percent of the poverty line and those unable to access health care that costs a maximum of 9.5 percent of their income are eligible for federal subsidies. The proposal goes after subsidy overpayments, institutes a sharp rise in obligations for families earning slightly more than 400 of the poverty line, and raises caps by about $500 — in all, enough to eke out about $20 million to offset the cost of the 1099 bill.

Nevada Democrat Shelley Berkley’s opposition to that approach has been unequivocal since it was introduced in committee. She’s argued emphatically that the Republicans’ offset structure is nothing more than an unacceptable tax on middle class families, going so far as to try to derail it earlier this week with a procedural motion that would have made implementing the repeal contingent on a guarantee it wouldn’t make things more expensive for middle class families.

But Thursday afternoon she flipped, and voted for the bill.

“Congresswoman Berkley has consistently supported repealing the 1099 reporting requirement and voted in the last Congress — and again today — for this needed change,” explained Berkley communications director David Cherry. “Given that the House and Senate have now passed different versions of legislation repealing the 1099 provision, there may still be changes made before this bill is ultimately signed into law.”

The turnaround was a sharp one, given Berkley’s concerted opposition to it a few hours earlier.

“Changing these caps is the wrong way to pay for this legislation and those most affected will be low-income and middle-wage earners already struggling to make ends meet in our down economy,” Berkley said in a press released issued Thursday morning. “This change threatens working families with having to pay $2000, $3000, $4,000 or more out of their own pockets to cover added health insurance costs...[and] threatens to punish middle-class earners who suddenly see an increase in their paychecks as a result of a new job, bonus or raise.”

Berkley was one of 76 Democrats who sided with the entire Republican caucus to back the bill in an overwhelming vote of 314-122. But that widespread support probably won’t matter, as the bill doesn’t stand too much of a chance of being taken up in the Senate.

That’s because Nevada Democratic Sen. Harry Reid has maintained an almost unbending principled opposition to most permutations of the bill.

Last month, the Senate overwhelmingly approved a repeal that was compensated for with a provision directing the Congressional Budget Office to identify programs and areas of the federal government that could be cut to pay for the change.

Nevada Republican John Ensign was one of them. But Reid was one of 17 Democrats to vote against it over concerns with that loose structure — preferring a proposal to cover the costs by reducing oil and gas subsidies, which couldn’t muster the votes to pass the Senate.

Reid’s not expected to take much of a liking to the House proposal, either.

“Senator Reid has concerns with the unintended consequences of the health care credit offset,” said Reid spokesman Zac Petkanas, who didn’t say Reid would outright oppose it but didn’t indicate Reid was in any rush to advance the House’s legislation.

The standoff isn’t a new one, of course — just the most recent round in an ongoing battle.

Because it’s the one bit of repeal both Democrats and Republicans agree on, 1099 requirements have become a very politically divisive issue. To the Democrats, it’s the last thing to resolve so the health care bill can be declared a done deal. But to the Republicans, it’s the first chip off the iceberg in a campaign to totally decimate the health care law.

Last year, House Democrats tried to pay for a 1099 repeal by stripping tax credits for companies that ship jobs overseas. All House Republicans voted against it.

The Senate didn’t have much luck either. Last September, senators failed two attempts to pass the universally-accepted 1099 reform, with all Republicans voting against a Democrat’s proposal to pay for it with oil and gas subsidies, and all but seven Democrats banding together to oppose a Republican measure that would have reduced public health spending and weakened the health care law’s individual mandate to foot the bill.

While in their respective chambers, lawmakers have been significantly more harmonious and bipartisan about their votes this year, but the approved approaches are still so different that nothing stands much of a chance of resolution unless either Reid or House Speaker John Boehner significantly bends.

Given how they’ve been locking horns lately over the budget, that doesn’t seem likely to happen anytime soon.

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