UPDATE: July 24, 2018: The House of Representatives passed a bill to repeal the medical device tax Tuesday evening, 283-132.
Dive Brief:
- The House of Representatives voted Tuesday to pass a bill introduced by Rep. Erik Paulsen, R-Minn., that would permanently repeal the 2.3% medical device tax. But it appears there are no plans for the Senate to take up the measure at this time.
- While the bill has garnered 277 bipartisan cosponsors prior to the vote, some Democrats call it a handout to medical device manufacturers and note that there is no plan to pay for it. The Congressional Budget Office estimated in 2015 that the repeal of the tax would increase federal deficits by about $24.4 billion over 10 years.
- AdvaMed tells MedTech Dive that it will make a strong push for repeal in August and September in the Senate ahead of President Donald Trump’s Supreme Court nominee Brett Kavanaugh’s confirmation vote.
Dive Insight:
The device industry has successfully put off the tax, one of several on industry in the Affordable Care Act, for years, with a lobbying campaign that won over even liberal Democrats.
AdvaMed spent $740,386 on lobbying in Q2 on a variety of issues including the repeal of the tax, Medicare payments for telehealth, changes to the Stark laws and CMS’s program for durable medical equipment. That number is a drop from the $1,050,000 the lobby spent in last quarter, which AdvaMed attributed to payouts of staff bonuses and salary updates in Q1.
The tax is currently on hold until 2020 due to a January continuing resolution that put off the levy for two years. AdvaMed had pushed for a permanent repeal of the tax, but was unable to push it across the finish line due to concerns on how to pay for the loss in revenue.
House Energy & Commerce Committee Ranking Member Frank Pallone, D-NJ, will not support the passage of the standalone Paulsen bill, a Democratic aide told MedTech Dive.
"Handing out more unpaid-for tax breaks to corporations shouldn’t be Congress’ priority when people’s health insurance premiums are skyrocketing across the country," the aide said.
Greg Crist, AdvaMed EVP of public affairs, argued that while the tax was implemented as a revenue raiser, the ACA would not be impacted were it to be repealed.
"Our argument has been that this was not directly tied to any policy initiative, there was no coverage decision based on this. It's not as if that revenue stream were to go away that one particular element of Obamacare would disappear," Crist said.
The White House backs standalone repeal, on Monday arguing it would lower healthcare costs and save jobs.
“This tax is an obstacle for patients seeking access to medical advances, and threatens to undermine the position of the United States as the global leader in healthcare investment and innovation,” the Statement of Administration Policy said.
