Obamacare Medical Devise Tax Revisited

“Last fall, as one of its last acts, the outgoing House of Representatives passed a bill to repeal the medical device tax. This year, leaders in the new Congress are signaling their intention to put that bill on President Obama’s desk. It’s a bad idea.

A 2.3 percent federal excise tax on sales of medical devices was included in the Affordable Act of 2010 to help pay for Obamacare. The tax has been collected since 2013, and the Joint Committee on Taxation predicts it will reduce the deficit by $26 billion over ten years.

Is it a good tax? Not particularly. It increases the cost of cardiac stents, artificial limbs, and joint replacements, for example. Manufacturers pass its costs along to patients and their insurance plans. But should it be repealed? No. Not yet. For three reasons.

First, contrary to industry claims, the tax is not heavy enough to imperil patients’ health or pose a significant burden on employment or medical innovation. Every tax has negative effects, to be sure; but as excises go, 2.3 percent of sales is modest. And as Sen. Minority Leader Harry Reid (D-Nev.) told The Hill, the device industry is “doing extremely well with ObamaCare.”

Second, repealing the tax now would be unfair, because the law it helps fund, Obamacare, burdens all of us, not just medical device makers.

Third, and perhaps most importantly, repealing the tax before we repeal Obamacare would weaken the coalition to replace the Affordable Care Act with better reforms that can actually make healthcare more affordable (and thus get more people covered).” - Don’t repeal the medical device tax (yet), the hill.com, 05/04/2015

Link to the entire article appears below:

http://thehill.com/blogs/congress-blog/healthcare/240846-dont-repeal-the-medical-device-tax-yet