Medical device tax takes center stage in budget showdown

GOP senators lead by Utah's Orrin Hatch stuck to their word that they'd work to repeal the 2.3 percent medical device tax that went into effect January as part of the Affordable Care Act--House Republicans included the provision in their bill to fund federal agencies into the next fiscal year, passed by the House late Saturday night.

The potential closing of government agencies becomes more likely as House Republicans refuse to back down on their quest to kill healthcare reform, a program designed by the Obama administration to extend health insurance to millions of uninsured Americans. They insist a one-year delay of the law and repeal of the medical device tax to fund the Affordable Care Act be part of a deal to keep federal agencies open once the new budget year begins Tuesday, as FierceHealthcare reports.

The med device tax--intended to help pay for costs associated with the healthcare reform law--is a point of contention for many legislators, as well as device makers, innovators and providers. Hatch, ranting about the tax last week, referred to it as "one of the stupidest aspects" of the ACA.

Politico reports a spokesman for House Speaker John Boehner (R-Ohio) said Sunday that Republicans would be "willing to at least consider a still-theoretical revised spending measure," dropping the delay of the ACA, but keeping the device tax repealed.

"That is a potential compromise, if the Senate does that," spokesman Michael Steel told Politico. "We will make that decision when and if the Senate acts." He called the repeal "common sense."

Some Democrats have shown support for the repeal of the medical device tax as well, but not the idea of including it in the continuing resolution. White House Spokesman Jay Carney said the device tax would "absolutely not" happen and Senate Majority Leader Harry Reid (D-Nev.) called the idea "stupid," according to Politico.

Meanwhile, the medical device tax community has been eyeing a repeal of the tax for years now.

In July, the Medical Imaging & Technology Alliance, the Advanced Medical Technology Association and the Medical Device Manufacturers Association announced medical device industry payments to the Internal Revenue Service already have passed the $1 billion mark.

A March 2012 report published by AdvaMed concluded the tax could result in the loss of close to 39,000 jobs and $8 billion in economic output.

To learn more:
- read the Politico article

Related Articles:
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