News Feature | June 4, 2015

House Committee Votes To Repeal Medical Device Tax

By Suzanne Hodsden


The U.S. House of Representatives Ways and Means Committee (WMC) voted on June 2 to repeal the 2.3 percent tax levied against many medical devices, which many lawmakers argue stifles innovation and job creation.

The Republican-run committee voted 25-14, mostly along party lines, with Rep. Ron Kind (D-Wis.) as the only democrat to support the bill. If the decision passes in both the House and the Senate, the repeal would represent a $24.4 billion loss in funding for the Affordable Care Act (ACA) over the next 10 years.

Because legislators provided no suggestions as to how these funds might be replaced, Democrats like Rep. Sander Levin (D-Mich.) see the repeal as a blatant attempt to dismantle the ACA one piece at a time, according to  U.S. News & World Report.

The Hill reports that many democrats claim the medical device industry willingly agreed to contribute to the cost of the ACA, and that the industry has seen an increase in revenue despite the tax.

Republicans disagree, citing concerns that the tax, which took effect in 2013, represents a major economic blow to high-technology jobs in the U.S.

Rep. Patrick Meehan (R-Pa.), quoted in U.S. News & World Report, said “It’s like putting sandbags on the wings of the Wright brothers as they try to figure out how to fly an airplane.”

Committee Chairman Rep. Paul Ryan (R-Wis.) told The Washington Times that the bill is “common sense.”

“It’s an iron law of economics that when you tax something, you get less of it,” Ryan said. “So we really got our wires crossed here. We want more medical devices. What we want less of is this bureaucratic meddling.”

Stephen Ubl, president and CEO of the Advanced Medical Technology Association (AdvaMed), released a statement commending the WMC on its decision.

“With an aging population and chronic disease growing at ever-faster rates, now is the time for more — not less — resources to advance cures and treatments to help people live healthier, more independent lives,” said Ubl, who finished the statement by urging the Senate to move forward with a similar bill.

In a more bipartisan 31-8 vote, the WMC also voted to repeal the Independent Payment Advisory Board (IPAB), a panel created by the ACA to monitor and potentially reduce the cost of Medicare.

Earlier this month, 500 organizations, including the American Medical Association, U.S. Chamber of Commerce, and the Healthcare Leadership Council, drafted a statement urging Congress to repeal IPAB, citing concerns that it would diminish seniors’ access to care.

Rep. Linda Sanchez (D-Calif.), a co-sponsor of the IPAB repeal, thanked committee Chairman Ryan “for finally agreeing to tweak and not repeal the ACA,” reported The Hill.

Both bills are scheduled to go to the House floor in the middle of June. Currently, there has been no vote scheduled for the Senate.