Healthcare

GOP, Dems join to repeal medical device tax

GOP, Dems join to repeal medical device tax

Two upper Midwest congressmen, a Republican and a Democrat, filed legislation Feb. 6 to repeal the Medical Device Tax included in President Barack Obama’s landmark healthcare reform law the Patient Protection and Affordable Care Act.

“Placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation,” said Rep. Erik Paulsen (R.-Minn.), who with Rep. Ronald J. Kind (D.-Wis.) introduced House Resolution 523, “Protect Medical Innovation Act.”

The bill was filed with 175 co-sponsors and will be the companion to a Senate bill expected to be introduced in the upper chamber by Sen. Orrin G. Hatch (R-Utah) and Sen.  Amy J. Klobuchar (D-Minn.).

The MDT is a 2.3 percent tariff on revenues, not profits, which means that an unprofitable medical device company with $100 million in sales owes a $2.3 million tax—on top of all its other troubles.

MDT repeal is part of the new approach by House Republicans to dismember the taxes, programs and regulations created with the passage of the 2,700-page PPACA.

In the previous Congress, there was a split between Republicans on how to approach PPACA.

Many wanted to keep the most hated aspects bundled in PPACA, in order to force an all-or-nothing rollback of the law. While others wanted to isolate those most hated aspects and force Democrats into recorded votes. These specifically-targeted House bills would then force Senate Democrats to choose between giving cover to their House comrades or the White House.

In this session of Congress, House Majority Leader Eric I. Cantor (R.-Va.) stepped in to settle the matter. Cantor wants the targeting approach. In his Feb. 5 speech “Making Life Work for More People,” where he revealed his agenda for the 113th Congress, the leader signaled that the MDT was the first of these bills to be launched.

Cantors said to his American Enterprise Institute audience, “If we want to reverse this trend, we should start by choosing to repeal the new taxes that are increasing the costs of health care and health insurance, like the medical device tax.”

The new medical device tax in ObamaCare makes it harder for researchers to develop these innovative devices in the U.S., he said.

Paulsen said, “In fact, companies have already laid off thousands of employees as a result of this onerous new tax, and more jobs will be lost now that this tax is in effect.”

The Minnesotan, who co-chairs the co-chair of the Congressional Medical Technology Caucus, said the tax is hurting people, too.

“It’s not only costing our country jobs and deterring innovation, but more importantly, it will reduce patient access to cutting edge medical products and treatments that save lives,” he said.

Kind said the government should not be getting in the way of technology that improves people’s lives.

“Repealing the medical device tax eliminates barriers to medical innovation, ensuring patients have access to life saving technologies and reduces the burden on tight R&D budgets, spurring job growth in the industry,” he said.

“Supporting and promoting American manufacturing, innovation, and research and development will increase our economic competitiveness and ensure our economy is built to last,” he said.

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