Senate panel slams medical device tax

A U.S. Senate committee this week issued a report slamming Obamacare’s medical device tax, as momentum for repealing the levy builds on Capitol Hill.

The medical device tax, enacted as part of the Affordable Care Act in 2010, levies a 2.3% tax on all U.S. sales of prescribed medical devices. It went into effect at the beginning of 2013.

The Senate Joint Economic Committee, led by Sen. Dan Coats (R-Ind.), this week issued a scathing report summarizing the pro-repeal arguments against the tax, which the U.S. House of Representatives voted last month to repeal. The Senate put the bill on the fast track shortly thereafter, despite a veto threat from the White House.

This week the JEC said the tax exists for only 1 reason, “to raise revenue.”

“It is through this myopic lens that supporters of the law view their arguments against repeal, offering arguments that suffer from flaws in logic, misunderstanding of economics, or misrepresentation of facts,” according to the JEC report. “The authors of the Affordable Care Act either failed to see or simply tossed aside myriad negative consequences which were bound to result from the law. The tax on medical devices has onerous implications on individual health outcomes as much as it does on businesses. From restricting consumer choice to deferring investment in innovation, consequences of the MDT promise to harm the healthcare industry and its consumers for years to come.”

In June, 46 Democrats joining the vote to approve H.R. 160, the “Protect Medical Innovation Act of 2015,” sponsored by Rep. Erik Paulsen (R-Minn.), 1 of several repeal bids circulating on Capitol Hill.

Sen. Orrin Hatch (R-Utah) is the sponsor of a Senate companion, S. 149 or the “Medical Device Access & Innovation Protection Act.” That measure has 38 co-sponsors, including 5 Democrats – Sens. Joe Donnelly of Indiana, Ben Casey of Pennsylvania, Jeanne Shaheen of New Hampshire and Minnesota’s Amy Klobuchar and Al Franken.

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 8 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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