Medical device tax: Paulsen goes grassroots to rally Senate support for repeal

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Rep. Erik Paulsen (R-Minn.) is amping up his ground game to win support for a repeal of the 2.3% medical device excise tax, asking online for grassroots help in his campaign to win support from the Democrat-controlled U.S. Senate.

Paulsen sent an open letter to members of the Medical Devices Group on LinkedIn yesterday, asking for help in urging their senators to sign on to a companion repeal bill sponsored by Sen. Orrin Hatch (R-Utah) in the upper chamber.

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"We have the support in the House, but in order to see this bill put into law, the Senate must also act. We need your help in making this legislation a reality," Paulsen wrote. "Please contact your Senator or Congressman. If they are on the list, thank them for the support. If they aren’t, explain why repealing the tax is important to you, patients, and our economy and ask them to co-sponsor."

Paulsen’s bill, the Protect Medical Innovation Act, has 199 co-sponsors in the House, according to Paulsen, who re-introduced the repeal legislation Feb. 6 with Rep. Ron Kind (D-Wis.). A companion bill in the Senate was filed Feb. 7 by Sens. Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.), with participation 4 Democrats of a total 9 senators.

A vote to repeal the tax, which went into effect Jan. 1, is virtually a sure thing in the House, where a similar medtech tax repeal bill passed passed 242-173 last year. But the effort still faces major obstacles in the Senate, where few sympathetic lawmakers have signed on.

One supporter who’s yet to put her name alongside colleagues is Sen. Elizabeth Warren (D-Mass.), who told MassDevice.com

that her hesitation hinges on how lawmakers plan to make up for the estimated $30 billion in revenue the tax is supposed to create. Warren is working with Klobuchar to hash out the details on how they intend to make up the difference, she told us in an exclusive interview last week.

The absence of a pay-for is a sore spot for many Democrats in both chambers. Sen. Kay Hagan (D-N.C.) told MassDevice.com late last year that she, too, is looking to medical device business leaders to work out a way to repeal the medical device tax without losing funding for healthcare reform.

The Paulsen-sponsored repeal bill that passed the House last year would have axed the tax using an 11th-hour pay-for: Cutting subsidies designed to make health insurance more affordable for low- and mid-income households. Democrats who otherwise voiced support for repealing the tax took exception and the Senate never took up the issue during the 112th Congress.

Lawmakers and the medical device industry’s lobbying arm have yet to unveil a new plan for paying for repeal.

"I’ve had this conversation with Sen. Klobuchar to, in part, try to understand the strategy of advancing a bill that doesn’t have a pay-for in it," Warren told us. "That’s one of the things I want to talk to industry about. But the basic principle is that we should not be taxing the industries we’re trying to develop – that’s what guides me on this."

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