Senate Votes to Repeal Medical Device Tax, Though Presidential Veto Likely

Last week the US Senate voted 52-47 in favor of repealing the 2.3% medical device tax that has been in place since 2013, among other provisions of the Affordable Care Act (ACA).

The tax was enacted as part of the 2010 overhaul of the US healthcare system and applies to the sales of all medical devices, including transcatheter aortic valves.

“In the 2 years since the implementation of the medical device tax, our member companies have experienced significant job losses and damaging reductions in R&D,” said Stephen J. Ubl, president and CEO of AdvaMed, in a press statement released by the device manufacturing advocacy group back in January. AdvaMed declined to comment on last week’s vote.

Further, a survey of their membership showed the tax has led to “employment reductions of approximately 18,500 industry workers and will lead to forgone hiring of 20,500 additional employees over the next 5 years,” and the report also found that 53% of respondents said they had reduced R&D as a result of the tax.

The bill the Senate passed—H.R. 3762, the “Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015”—was a “significantly strengthened” version of the one the House of Representatives originally voted on, as reported by The Hill. As such, the House will need to approve it again before it reaches the White House.

But Politico reports that the bill is being sent on a “kamikaze mission to the president’s desk,” as Obama will almost definitely veto it. But, they say, Republicans are likely laying the groundwork to repeal the ACA if one of their own takes the presidency next year.

The medical device tax repeal is but a small portion of the bill, which aims to ransack much of Obamacare—it also repeals the expansion of Medicaid, cuts funding for Planned Parenthood, and eliminates the “Cadillac tax” on pricey insurance plans.

All of the Thursday’s “yea” votes came from Republicans, Bloomberg reported, although Republican Senators Susan Collins of Maine and Mark Kirk of Illinois voted negatively.

The medical device tax was initially created to help pay for expanding health coverage to the millions of uninsured Americans, based on the assumption that device manufacturers (and other industries) will themselves benefit financially from the increase in patients requiring their products.