@realjohnboy,
I agree the 1099 requirement is a weird one., seemingly totally unrelated to health care. I recently had a request for information so that they could send me one from a very small customer of mine. I've always interpreted the 1099 thing as being for contractors anyway, not for our purchase of merchandise, because if it was, we would have tens of millions of people ten ninety nining Walmart every year, wouldn't we? The mountain of paperwork would increase the costs of Walmart, and the IRS, and would be a paper nightmare.
However, I have had large customer of mine send me 1099s, which I have dutifully recorded with the tax return, but it makes little sense to me, because it was for merchandise, not for contract work.
I've wondered about this, do construction contractors 1099 Home Depot for all that they purchase there? The entire 1099 issue is but one of many issues that convinces me that the IRS does not know what it is doing.