House Votes to Repeal Medical Device Tax

July 27, 2018

The House voted July 24 to fully repeal a 2.3 percent excise tax on medical devices, with 57 Democrats joining 226 Republicans in supporting the measure.

The Protect Medical Innovation Act of 2018 (H.R. 184) had 279 cosponsors from both sides of the aisle and was approved with a vote of 283 to 132. The permanent repeal follows two temporary suspensions of the tax since it was first enacted in 2013 to help pay for the Affordable Care Act.

The tax received its first temporary moratorium, also with bipartisan support, under the Consolidated Appropriations Act of 2016 and it came back into effect Jan. 1, 2018. A two-year suspension was enacted Jan. 22 — just a week before the first payments on the tax were going to be due (IDDM, Jan. 29).

The measure now moves on to the Senate where its path remains uncertain.

“Our strategy is clear: get to 60 votes so the Majority Leader can put this bill on the floor and pass it,” said AdvaMed President and CEO Scott Whitaker. “We have eight Democrats now. If we can get two-to-four more, I’m confident the bill will pass. We’ve never been closer. So we’ll spend the coming weeks making our case, both here in Washington and back in key states.”

One Congresswoman who initially cosponsored the bill, Rep. Dina Titus (D-Nev.), ultimately rescinded her support and voted against repeal.

“I originally cosponsored H.R. 184 as part of a package of bipartisan ideas to move forward on health care reform and address issues with the implementation of the Affordable Care Act (ACA),” said Congresswoman Titus. She said changes that have occurred in the last 16 months caused her to reconsider. She is concerned the bill’s passage will add $20 billion to the deficit.

Other lawmakers have long argued that the medical device excise tax could lead to higher prices for consumers as well as the loss of manufacturing jobs. AdvaMed cites U.S. Department of Commerce indicating that the medical device industry employs roughly 400,000 people, but nearly 29,000 jobs were lost while the medical device excise tax was in effect.

Some but not all of those jobs were recovered by the temporary suspension, according to Rep. Erik Paulsen (R-Minn.), the bill’s leading sponsor.

“Companies responded [to the temporary suspension] by hiring more engineers and more technicians and putting more money in research and development projects for these new life-saving technologies,” said Paulsen before the vote on the House floor.

After the measure passed the House, Rep. Paulsen issued a statement reiterating his belief that a permanent repeal will lead to job creation: “I’m more optimistic than ever we’ll be successful in giving these job creators the certainty and predictability they need to thrive.” — Tiffany Winters