Device industry advocates and Rep. Erik Paulsen (R-MN), opponents of the health care law’s 2.3 percent excise tax on medical devices, are pushing to repeal the provision before it takes effect next year. Lawmakers are also considering delaying the implementation of the tax. The tax goes into effect Jan. 1, and the IRS released the final rule for it this week.
Minnesota Democrats Al Franken and Amy Klobuchar oppose the tax, he noted, as do incoming Democratic senators Elizabeth Warren of Massachusetts and Joe Donnelly of Indiana.
“I think the chances of it being included are just as great as the chance of a final deal coming together before the holidays,” said Paulsen, R-Minn., whose state is home to a number of medical-device companies. “The one bright spot that sort of seems to stick out is that there’s bipartisan support in both bodies now. And that is important.”
The House passed Rep. Paulsen’s bill to repeal the tax on medical devices in June, with support from 37 Democrats. But the effort stalled in the Democrat-led Senate, which has been reluctant to repeal provisions of the 2010 health care law.
Majority Leader Eric Cantor indicated on Fox News last month that he sees the deficit reduction negotiations as a possible opportunity to address the issue. The Virginia Republican said the tax would hurt job growth and could cause individuals to lose access to certain treatments.
Advocates are pushing Congress to clear legislation that would abolish the tax before the end of the year. On Nov. 13, more than 800 organizations, companies and others sent a letter to Senate leaders in both parties calling on the chamber to repeal the tax before it goes into effect. They said the tax “will stifle innovation and cost thousands of high-paying jobs” as well as increase health care costs.
According a Congressional Budget Office estimate released in June, repealing the tax would cost more than $29 billion over 10 years. House Republicans offset the costs of the repeal language and other provisions that were incorporated into Rep. Paulsen’s bill for floor consideration by removing limits on reclaiming overpayments of subsidies under the overhaul.
“I will continue to press Congressional leaders to eliminate the tax, and until that happens, I believe that we need to delay its implementation so that the medical device industry isn’t hurt while we find a permanent — and fiscally responsible — solution,” Franken said in an emailed statement.
Brian Connell, director of government relations for the medical-imaging alliance, said ensuring that taxes do not increase is a key part of the fiscal negotiations and that his group is hopeful Congress will act by the end of the year.
“We think that these are great middle-class jobs,” he said. “It’s just another area where taxes shouldn’t go up on January