House Republicans want to pay for the repeal of the health care overhaul's 1099 reporting provision—which was intended to raise billions in revenue by requiring small businesses to generate a slew of additional tax forms—by using money designated for the law's middle class insurance subsidies. Specifically, they want individuals whose income changes during the middle of the year to have pay back a greater share of the subsidy at tax time if it turns out that their reported yearly income is higher than when they took the subsidy.
Democrats, who already allowed the subsidies to be used previously in order to temporarily prevent a large drop in physician's Medicare reimbursements (the "doc fix"), aren't happy. Changing the subsidies to require greater repayment "would saddle hundreds of thousands of middle-income taxpayers with a hefty tax increase," Rep. Sander Levin told TPM. So it's a tax increase when someone has to give back part of a means-tested federal subsidy because they no longer qualify for it?
Democrats are also gravely worried that some people, aware that some of the subsidy money might eventually have to be paid back, won't take the subsidies. Apparently, that would be bad. Here's the left-leaning Center on Budget and Policy Priorities: "The offset would discourage many people with modest incomes from applying for subsidies in the first place and lead more of them to remain uninsured instead (and pay a modest penalty for failing to have insurance)." If they're actually worried about the penalty for not purchasing insurance, the solution seems fairly obvious: Repeal it. I'm sure plenty of Republicans would be happy to oblige. But mostly it seems as if they're worried that too few people will sign up for their taxpayer-funded insurance subsidy. We certainly can't have that, can we? Anyway, it's always nice to see politicians willing to fight to ensure that every American gets what they're entitled to—as long as what they're entitled to is paid for by someone else.