Republicans and Democrats in Congress are reportedly close to striking a deal on a major tax package that would include 2-year pauses for the medical device tax and the 40% “Cadillac tax” on high-benefit plans.
Democrat supporters of the healthcare law are concerned that even pausing the taxes could give opponents the opening they need to begin rolling back Obamacare and, eventually, outright killing it, according to The Hill.
The medical device tax is a 2.3% levy on all U.S. sales of medical devices. Passed as part of the Affordable Care Act in 2010, it went into effect at the start of 2013. Measures in both the House and Senate to repeal the tax have had bipartisan support, and each chamber has several proposed bills to do just that.
A sticking point for some pro-repeal Democrats is a so-called “pay-for” to cover the revenues that would be lost by killing the medtech tax.
“I’ve always been the position that the medical device tax should be paid for, in part because it sits alongside a broader set of gives for other industries,” Sen. Chris Murphy (D-Conn.) told the website. “It’s harder to get the medical device tax by itself.”
“I certainly care much more about the Cadillac tax than I care about the medical device tax,” Murphy said.
“We’re all worried about how we support the Affordable Care Act and some of us are really worried about the giant tax extender package,” added Sen. Claire McCaskill (D-Mo.). “So yes, some of us are more worried about the fiscal result of repealing a bunch of taxes or extending tax breaks in terms of what we’re facing.”
McCaskill said she supports a temporary delay of both taxes, but said, “I’m not sure I’ll go so far as a repeal.”
Republicans are hoping to use the medical device tax as a chip to be trading in exchange for agreeing on the Cadillac tax.
“That’s a major Democrat ask, so there needs to be something proportionate in terms of achievement on our side,” Sen. John Cornyn (R-Texas) told reporters this week, The Hill reported.
The Senate voted Dec. 3 to gut key provisions of the Affordable Care Act and do away with the medical device tax, but the measure faces certain death as soon as it hits President Barack Obama’s desk.
The upper chamber voted 52-47 to pass the bill, with 2 Republicans crossing the aisle to join Democrats in voting against H.R. 3762, the “Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015.” The measure must still be reconciled with the original version passed by the U.S. House of Representatives before it can be sent to the White House for a veto.
In June, 46 Democrats joined the vote to approve H.R. 160, the “Protect Medical Innovation Act of 2015; last month, the House passed the Restoring Americans’ Healthcare Freedom Reconciliation Act, which included the Protect Medical Innovation Act’s provision to eliminate the levy.
The Senate’s corresponding repeal bid, sponsored by Sen. Orrin Hatch (R-Utah), is S. 149 or the “Medical Device Access & Innovation Protection Act.” The Hatch measure has 39 co-sponsors, including Democratic 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, those bills 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 10 co-sponsors, all Democrats.
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