This was a vote on an amendment by Sen. Bob Menendez (D-NJ) that would have blocked the implementation of legislation that effectively cut subsidies for uninsured Americans to purchase health insurance if the secretary determined that an effect of that legislation would be to increase health insurance premiums or cause more Americans to lose their health insurance. This amendment was offered to legislation repealing a provision of a major health care law enacted in 2010 that required small businesses to file a tax form (a 1099 form) for all individuals who had received $600 or more from a business in exchange for property or merchandise, and cutting subsidies for uninsured Americans to purchase health insurance
The landmark 2010 health care reform law subsidized the purchase of private health insurance by uninsured Americans by providing the uninsured with tax credits and deductions to buy insurance. The underlying bill, however, effectively cut those subsidies by requiring Americans who received them to pay a tax penalty if their income for a given tax year was higher than initially thought. Under the bill, an uninsured person who qualified for a tax credit to obtain health insurance--but then received a pay-raise--would be required to pay a penalty. For example, if an individual earned $44,000 annually, he or she would be eligible under the 2010 health care reform law for tax credits to purchase health insurance. Yet if that person’s salary was raised, he or she would have to repay his or her full credit in the form of a tax penalty – effectively eliminating any subsidy for heath insurance. Menendez’s amendment would have required the Secretary of Health and Human Services (HHS) to block the implementation of the tax penalty if the secretary determined that it would increase health insurance premiums or cause more Americans to lose their health insurance.
Menendez urged support for his amendment: “I offer this amendment on behalf of middle-class families and on behalf of small businesses. I support repealing the 1099 reporting requirement…However, I strongly believe we must do so in a manner that does not increase the burden on our small businesses and their employees, and that is exactly what I fear H.R. 4 [the underlying bill] does….It increases tax penalties on middle-class families, leaving some with a potential tax burden of $10,000 or more. How would most middle-class families deal with a tax bill of $10,000 or more just because their income may have increased $1 above the eligibility limit during the year for which they got a subsidy?”
Sen. Max Baucus (D-MT) also supported this amendment: “…My colleague from New Jersey proposed what I think is a very reasonable amendment...This [underlying bill] could increase premiums that people pay under health insurance, or reduce the benefits of their health insurance coverage, especially in the small business community, and he believes his amendment would reverse the provision--and it does in fact do that--if the HHS Secretary determines it will increase premiums or if it will reduce coverage, that is on health insurance coverage for small businesses.”
Sen. Mike Johanns (R-NE) opposed the amendment, arguing that the tax penalties would affect individuals who never should have received subsidies for health insurance in the first place. The House had already passed the underlying bill without the language contained in Menendez’s amendment. Thus, Johanns also argued that by passing the amendment, the Senate would delay the repeal of the 1099 reporting provision because the House and Senate bills would then need to be reconciled before President Obama could sign the legislation into law. He contended: “…With all due respect to my colleague from New Jersey, there have been over 200 business groups that have expressed opposition to the Menendez amendment, and that would include…the National Association of Manufacturers, the Franchise Association, and the chamber of commerce. You see, requiring people to pay back what they should not have received in the first place is regarded as good government, not bad policy. That is what should be happening. The second thing I would say about this is that this becomes a roadblock because we end up with a different House bill and a different Senate bill. If this is such a great idea, attach the amendment to some other bill that is coming along, and we can get the study done. So… I do believe very strongly that we need to defeat this amendment.”
The Senate rejected this amendment by a vote of 41-58. Voting “yea” were 41 Democrats—including a majority of progressives. All 46 Republicans present and 12 Democrats voted “nay.” As a result, the Senate rejected an amendment that would have blocked the implementation of legislation that effectively cut subsidies for uninsured Americans to purchase health insurance if the Secretary of Health and Human Services determined that an effect of that legislation would be to increase health insurance premiums or cause more Americans to lose their health insurance.