Medical device tax repeal advances in the U.S. House

WASHINGTON – A committee hearing over legislation introduced by 3rd District Republican Congressman Erik Paulsen to repeal a tax on medical devices turned heated Thursday as Republicans and Democrats took turns re-litigating the fight over the 2010 health care law.

While many Democrats on the panel said they were uncomfortable with the tax and would be happy to see it reduced or eliminated, in the end only Democratic Reps. Ron Kind of Wisconsin and Shelley Berkley of Nevada joined all of the Republicans present to vote 23-11 in favor of eliminating the tax.

Repealing the tax, which goes into effect next year, has been Paulsen’s biggest legislative goal since 2010, when he introduced his first bill to repeal the tax not long after President Obama signed the measure into law. Minnesota is home to a number of medical device companies, including Medtronic, and Paulsen has become their strongest advocate in Congress. He co-chairs the Congressional Medical Technology Caucus and in the past has described himself as a voice for the industry on Capitol Hill.

During the hearing, Paulsen described the 2.3 percent excise tax on medical devices as an “ill-conceived tax, which will increase health care costs, reduce patient access to new technologies, and cost us hundreds of thousands of American jobs.”

Paulsen and other Republicans touted a 2011 study funded by an industry trade association, AdvaMed, which claimed the tax would cost the industry 43,000 jobs in the United States and have a significant negative impact on industry revenues.

A report by Paul Van de Water of the liberal-leaning Center for Budget and Policy priorities dismissed those concerns, arguing, “The provision is sound, however, and the industry lobbying campaign aimed at repealing it is based on misinformation and exaggeration.”

Republicans did not offer a plan to pay for the estimated $29 billion cost of eliminating the tax, a move that prompted intense criticism from Democrats. After the hearing, Paulsen said he expected House leadership to select an offset when the measure comes to the floor next week.

Some Democrats on the panel accused Republicans of trying to dismantle the 2010 health care law bit by bit while others noted that the tax helped pay for the extension of medical insurance to 30 million people who are currently uninsured.

The hearing comes just weeks before the U.S. Supreme Court is expected to determine the constitutionality of the health care law which Republicans are determined to repeal before it fully goes into effect in 2014.

While Paulsen’s bill is almost certain to pass the U.S. House, its fate in the U.S. Senate is up in the air. DFL Sens. Amy Klobuchar and Al Franken have both said they would like to see the burden lifted from the industry but have not co-sponsored similar legislation introduced in the Senate.

Comments are closed.