Senate to Vote on Repealing 1099 Reporting Provision

The House bill increases the amount families are required to pay and removes the repayment cap for families with incomes over 400% of the federal poverty line.

“The protection against a repayment ‘cliff’ for families with incomes between 400% and 500% of the federal poverty level was put into place in a nearly unanimous vote of the House and Senate in December,” the letter said. “H.R.4 removes this agreed-upon protection,” the letter said.

In a statement, House Republicans called Democrats hypocritical because they supported the same pay-for during the December debate on how to stop a 21% cut in payments to doctors under Medicare.

In comments during the March 3 floor debate on the House bill Rep. David Camp, R-Mich., chairman of the House Ways and Means Committee, said that according to the non-partisan Joint Committee on Taxation, “under the better enforcement rules of H.R. 4, there will be some people who decide not to buy coverage through the health insurance exchange because it’s no longer as attractive to accept a taxpayer-funded subsidy that they are not eligible for, now that they would be required to pay a larger share, or in some cases all of it back under H.R. 4.

“For example, under current law, a household making $105,000 might think it’s worth understating its income–or at least not updating their income information–in order to receive a $12,000 exchange subsidy because it would only have to pay back $3,000 if it got caught,” Mr. Camp said.

“But the household is less likely to do so under H.R. 4 because it would have to pay back the entire subsidy, given that it wasn’t eligible for it in the first place,” Mr. Camp concluded.

The Democrats disagreed with the interpretation by the Republicans.

The Democratic statement, from Rep. Sander Levin, D-Mich., ranking minority member of the House Ways and Means Committee, said the healthcare reform bill implemented a graduated income approach that protects those with lower incomes and eliminated the cliff that caused people to face massive tax increases if their income rose to more than 400% of poverty.

By contrast, the Republican plan takes $25 billion additional dollars from middle class families by making the “true-up” policy less responsible and removing protections from excessive tax increases for middle-class families.