House Approves Device Tax Repeal Bill
The U.S. House of Representatives approved on June 7 a bill to repeal a medical device tax, but manufacturers still face a tough fight in getting the relief they want.
The measure, authored by Rep. Erik Paulsen, R-Minn., was approved 270-146, and would repeal the 2.3% excise tax on device makers that is scheduled to go into effect next year. The tax was approved in 2009, and is expected to generate $29 billion over the next ten years to pay for the healthcare reform Affordable Care Act.
Device trade groups praised the result, saying the tax has the potential to stifle innovation and job creation.
“Today’s vote is a vote to protect high-wage American jobs, maintain our global competitive leadership, and encourage the research and development needed to find tomorrow’s treatments and cures,” said Stephen J. Ubl, president and CEO of the Advanced Medical Technology Association (AdvaMed), in a statement.
Yet the bill, H.R. 436, Health Care Cost Reduction Act of 2012, faces considerable hurdles.
The White House issued a letter prior to the vote threatening to veto the bill. “The medical device industry, like others, will benefit from an additional 30 million potential consumers who will gain health coverage under the Affordable Care Act starting in 2014,” the letter reads. “This excise tax is one of several designed so that industries that gain from the coverage expansion will help offset the cost of that expansion.”
A more immediate hurdle is the fact that Senate Majority Leader Harry Reid, D-Nev. told reporters he doesn’t plan to consider a vote on the bill, which includes provisions to allow money from health savings accounts to pay for over-the-counter drugs and refunds up to $500 of unused money from health flexible spending accounts, according to an article on Politico.
Posted: June 13, 2012