Indiana Governor Renews Push For Medical Device Tax Repeal

By Ryan Brinks

Indiana Governor Mike Pence is leading a new wave of pressure for President Barack Obama and federal lawmakers to repeal the medical device excise tax created to help fund Obama's healthcare law.

“Repealing the medical device tax will allow companies to expand and grow jobs, not only in Indiana but across our great nation,” Pence said in a March 31 letter, according to an Indianapolis Business Journal article. “This thriving industry should be allowed to innovate and grow, rather than be hampered by an industry-specific tax.”

Pence is not alone. Both of Indiana's U.S. senators support the repeal. One of them, Senator Joe Donnelly, sent a letter to Senate Finance Committee Chairman Ron Wyden, on April 9.

“I have seen first-hand the effects of the tax on my state, where a number of companies have foregone expansion and others have contemplated moving jobs outside the United States,” he wrote. “I support tax policies that promote American jobs and innovation, and I look forward to working with you and our colleagues on both sides of the aisle to address this important issue.”

A group of business leaders in Pittsburgh raised similar concerns about the medical device excise tax at a special April 2 meeting with Sol Ross, the director of the U.S. Department of Health and Human Services' private sector engagement.

The group, the Pittsburgh Technology Council, argued that taxing revenues instead of profits was particularly harmful to start-up businesses and that administrative requirements of the Sunshine Act provision of the Affordable Care Act were also burdensome, according to a Pittsburgh Business Times report.

In the past, Obama's refutation focused on the potential benefits to device makers brought by millions of newly insured customers through his law, the IBJ article noted. Meanwhile, the tax is expected to generate $29 billion over 10 years.

The repeal was rejected on procedural grounds in an April 3 extension of expired tax provisions passed by the Senate Finance Committee. According to a Bloomberg BNA article, however, the fact that it was dismissed on procedural grounds could indicate that the Device Tax will be discussed again on the Senate floor or as an attachment to other legislation. Wyden also promised future discussion on the repeal of the medical device tax.