Three reasons the medical device tax repeal fight doesn’t end with the shutdown

Three reasons the medical device tax repeal fight doesn’t end with the shutdown

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By: Brian Johnson

Don’t panic, there’s plenty of room for optimism in the fight to repeal the medical device tax.

The medical device industry came damn close to getting the medical device tax knocked out of existence in this latest round of budget brinksmanship in Washington.

Close may only count with horseshoes and hand grenades, but there’s still room for optimism for supporters of repealing the 2.3% medtech levy – however disappointing it may be to members of the medical device community that no repeal or delay was included in the bipartisan Senate deal to re-open the federal government and raise the debt ceiling.

1. Significant movement in the White House’s position

For the past 2 years, the Obama administration has repeatedly said that medical device tax repeal is a non-starter, maintaining that the levy represents the medtech industry’s fair burden in helping to fund healthcare reforms that will bring them more customers. President Obama promised to veto any bill that includes a repeal of the tax.

“The healthcare bill is going to provide those medical device companies 30 million new customers,” Obama told a reporter for The Weekly Standard. “It’s going to be great for business, and they’re doing really well right now.”

But the budget impasse brought out some softer rhetoric from Pennsylvania Ave. when it comes to the device tax. The White House said for the 1st time during the protracted fight that it would consider a compromise on the levy, as long as lawmakers could make up for the lost revenue. The tax is forecast to raise about $30 billion over 10 years.

Long-time device tax repeal advocate Sen. Orrin Hatch (R-Utah) told reporters that the president conceded that the levy, a 2.3% excise tax on U.S. sales of prescribed medical devices, is “not part of the core program” of the Affordable Care Act after a face-to-face meeting with Obama last week.

And just yesterday, the White House reaffirmed a willingness to talk about changing the device tax.

“What we have always said is, [regarding] discussions of the medical device tax or ACA that lawmakers want to talk about, is that we are willing to have those discussions, but not as ransom to fund the government effort or to buy votes,” White House spokesman Jay Carney said. “The issue of the medical device tax has been in the air for the last several weeks. … We would be willing to talk about [the tax] with lawmakers who wanted to address that provision.”

But Carney’s exchange with reporters didn’t come without a jab at GOP lawmakers who want to repeal the tax.

“When it comes to the device tax, it’s important to note those who portray themselves as paragons of fiscal discipline never acknowledge that repealing it would raise the federal debt,” he said.

 

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