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Efforts to Kill Reinstated Medical Device Tax Ramping Up

January 19, 2018

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Congressional efforts to kill the newly reinstated medical device tax are ramping up.

A short-term federal spending plan proposed this week by House Republican leaders would suspend the 2.3 percent sales tax for two years, retroactive to Jan. 1. Congress has until Saturday to extend spending or risk a government shutdown.

Meantime, Massachusetts’ Democratic senators have introduced legislation that would eliminate the tax.

“Until we have a bill that’s voted on and signed, we’re anxious,” Anne Hathaway, executive director of the Indiana Medical Device Manufacturers Council, said Wednesday in a telephone interview.

“Any repeal at this point is good for our members and our industry,” Hathaway said about prospects for the tax delay, adding that the council will continue to advocate for a permanent repeal.

Indiana is home to at least 16,000 medical device industry jobs, many of them at orthopedic implant producers in and around Warsaw.

The House proposal to delay the tax “is recognition that innovators should never have to make another payment as a result of this disastrous policy again,” Mark Leahey, president and chief executive officer of the Medical Device Manufacturers Association, said Wednesday in a statement.

The tax was imposed on device manufacturer sales in 2013 to help fund the Affordable Care Act, which created a subsidized insurance marketplace for Americans who lack access to employer-provided coverage. The Republican-controlled Congress suspended the tax for 2016-17 but allowed it to take effect again this year.

Lawmakers from Indiana have been vocal opponents of the tax, contending it hinders job growth and medical innovation. Rep. Jim Banks, R-3rd, said Wednesday that his “top legislative priorities” include eliminating the tax.

“While I support a full repeal of this misguided tax, a two-year delay will make a significant difference for Hoosier device manufacturers and workers,” Banks said in a statement.

Rep. Jackie Walorski, R-2nd, said in a statement that a tax suspension “will provide relief to local manufacturers and protect Hoosier workers. … I look forward to voting for this bill and getting back to work to end the medical device tax once and for all.”

During a floor speech Wednesday, Rep. Luke Messer, R-6th, said the tax “is bad for patients because it drives up the cost of much-needed medical devices.” Messer, who seeks the GOP nomination for a seat in the Senate, said that ending the tax “will be good for Hoosier workers and good for Indiana’s economy.”

Last week, Democratic Sens. Edward Markey and Elizabeth Warren reintroduced a bill that would repeal the tax. The legislation would offset its projected revenue by eliminating $29 billion in tax breaks for oil companies over 10 years.

Eliminating the device tax “is bipartisan, definitely,” Hathaway said.

See More at the Source: Bipartisan push to kill medical device tax | Indiana | The Journal Gazette


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