House set to vote on medical device tax repeal, despite White House veto threat

The Republican-led U.S. House of Representatives is moving ahead with a vote on repealing the medical device tax, despite a threat from the White House that President Barack Obama will veto the bill if it makes it to his desk.

The House Rules committee yesterday advanced H.R. 160, “Protect Medical Innovation Act of 2015,” to the House floor for a vote, a day after the White House’s Office of Management & Budget said the bill is nothing more than “a large tax break to profitable corporations.”

The medical device tax, enacted as part of Obamacare and put into effect at the beginning of 2013, levies a 2.3% tax on all U.S. sales of prescribed medical devices. It’s forecast to raise between $20 billion and $30 billion over 10 years. In a June 15 notice, the OMB said, “If the President were presented with H.R. 160, his senior advisors would recommend that he veto the bill.”

“The medical device industry, like others, will benefit from millions of new consumers who are gaining health coverage under the Affordable Care Act. 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. Its repeal would take away a funding source for financial assistance that is working to improve coverage and affordability and would increase the Federal deficit by $24.4 billion over 10 years,” according to the OMB. “In sum, H.R. 160 would increase the deficit to finance a permanent and costly tax break for industry without improving the health system or helping middle-class Americans.”

Earlier this month, the House Ways & Means Committee approved the measure along sharply partisan lines, with 25 Republicans and a lone Democrat (Rep. Ron Kind (D-Wis.)) voting to pass H.R. 160 and an amendment from chairman Rep. Paul Ryan (R-Wis.) that would put the repeal into effect beginning the quarter after its passage into law. H.R. 160 has 241 co-sponsors, including 41 Democrats. The bill, sponsored by longtime medical device industry champion Rep. Erik Paulsen (R-Minn.), is 1 of several repeal bids circulating on Capitol Hill.

Sen. Orrin Hatch (R-Utah) is the sponsor of the Senate’s companion bill, S. 149 or the “Medical Device Access & Innovation Protection Act.” The measure has 36 co-sponsors, including 5 Democrats.

A pair of Democrat-led bills would also repeal the tax, but unlike the Hatch and Paulsen measures would replace the lost revenue by closing tax loopholes for the energy industry. A bill by Sen. Ed Markey (D-Mass.), S. 844 or the “No Taxation on Device Innovation Act,” has no co-sponsors. Its counterpart in the House, H.R. 1533 or the “Medical Device Tax Elimination Act” sponsored by Rep. Alma Adams (D-N.C.), has 5 co-sponsors, all Democrats.

Repealing the tax also came up in a U.S. Senate subcommittee meeting in April, when the Senate Finance Committee’s healthcare panel, led by Sen. Patrick Toomey (R-Pa.) and ranking member Sen. Debbie Stabenow (D-Mich.), convened the hearing to consider the impact of the medical device tax.

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