Health Care Reform Repeal Small Business 1099

While the possibility of a government shutdown grabbed most of the headlines last week, many analysts and media focused on particulars of the new House Republican budget plan unveiled by Rep. Paul Ryan (R-WI). Reactions to the plan were widely split, but few would disagree that the plan would have a dramatic impact on health care if enacted. The proposal would allow states more control over Medicaid but cut the amounts states receive from the federal government over a decade; significant changes to Medicare would restructure the fee-for-service system to a premium-support model while gradually increasing the age of eligibility to 67; and it proposes $1.4 trillion in deficit reduction while de-funding the Affordable Care Act (ACA). The Congressional Budget Office (CBO) weighed in with its own analysis by the end of the week, finding that seniors and people with disabilities would face significant increases in their out-of-pocket costs under the Ryan proposal. As for Medicaid, the CBO found that federal funding under a new block grant approach would be more predictable, but it would lead to greater uncertainty for states as to whether the federal contribution would be sufficient during periods of economic weakness.

By a vote of 87 to 12, the Senate last week approved legislation to repeal the widely unpopular 1099 reporting requirement buried in last year’s health reform law. The requirement would have driven up costs and created administrative hassles for small businesses, and Aetna insurance argued for the repeal. The bill also would repeal a similar 1099 reporting requirement related to rental property. The legislation was approved by the House in early March, which means it goes to the President for his certain signature.  Although Senator Menendez (D-NJ) tried to amend the bill (to nullify the Republican “pay for” provision), the effort fell short. No further floor drama surfaced, and the bill passed easily. An additional takeaway is the fact that Republicans and Democrats cooperated legislatively to actually amend ACA.

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