A plan to repeal and replace the Affordable Care Act floated by Republicans yesterday – which critics have already dubbed “Trumpcare” or “Obamacare Lite” – would permanently repeal the medical device tax effective Jan. 1, 2018.
A hold on the 2.3% tax on U.S. medical device sales went into effect at the beginning of 2016 and is slated to expire by the end of this year. The legislative plan released last night by GOP members of the U.S. House of Representatives would kill the tax for good effective Jan. 1, 2018.
“AdvaMed commends the House Ways & Means Committee for moving forward with legislation that will permanently repeal the medical device excise tax. Bipartisan majorities in both the House and Senate are on record in support of repeal of this onerous tax, which has been associated with a significant loss of American jobs,” president & CEO Scott Whitaker said today in prepared remarks. “Repealing the tax will provide medical technology innovators with the long-term certainty necessary to support future job growth and sustainable, cutting-edge R&D that will ultimately lead to the next generation of breakthroughs in patient care and treatment. We urge the House and Senate to act expeditiously to pass this important legislation.”
“MDMA fought against the medical device tax in 2009 when it was first proposed, and when our board members testified before the House Ways & Means Committee in 2012, they made it very clear what the impacts of repealing the medical device tax would be. The 2-year suspension of the tax has proven these predictions to be true with boosts to job creation and innovation, and the inclusion of a full repeal of the medical device tax in reconciliation legislation is a positive 1st step to permanently end this punitive policy once and for all,” said MDMA president & CEO Mark Leahey in a statement.
(Read our recent analysis: 5 ways Trump is making things uncertain for medtech)
The House GOP plan would also immediately remove the penalty for people who do not have health insurance and halt the expansion of Medicaid at the beginning of 2020, capping funding for the federal healthcare program for the poor. It would preserve a pair of popular Obamacare features: Allowing children to remain on family health plans until age 26 and barring insurers from denying coverage for pre-existing conditions.
The plan would abolish subsidies for purchasing healthcare, instead creating age-based tax credits that could be used to buy health insurance; the credits would be capped for people with higher incomes. And it would direct $100 billion to the states for programs aimed at certain populations, such as high-risk pools of the sickest patients.
“Our legislation transfers power from Washington back to the American people,” House Ways & Means chairman Rep. Kevin Brady (R-Texas) said in prepared remarks. Appearing on Fox News last yesterday, Brady downplayed the conflict among Republicans about certain provisions of the plan.
“We’ve been listening very carefully to our Republican members for months now to make sure we get it right,” he said. “We know we can do so much better than Obamacare. … I guarantee you, House Republicans are going to deliver for the president.”
“Today marks an important step toward restoring healthcare choices and affordability back to the American people,” the White House said in a statement.
House speaker Rep. Paul Ryan (R-Wis.) claimed that ObamaCare is “rapidly collapsing” and pledged that the GOP’s American Healthcare Act will “give every American access to quality, affordable health insurance,” according to The Hill.
“Working together, this unified Republican government will deliver relief and peace of mind to the millions of Americans suffering under ObamaCare. This will proceed through a transparent process of regular order in full view of the public,” Ryan said.
But conservative factions in the Lower Chamber, the House Freedom Caucus and the Republican Study Committee, are already grumbling about the new GOP plan.
“Keep the Cadillac tax in place? Keep Medicaid in place until 2020?” Freedom Caucus co-founder Rep. Jim Jordan (R-Ohio) said, according to the Washington Post. “We didn’t have Medicaid expansion in the bill we sent to President Obama, but we have it in the 1 we send to President Trump? That makes no sense to me.”
Freedom Caucus chairman Rep. Mark Meadows (R-N.C.) called the plan “certainly a step in the right direction.”
“The fundamental question is, when we see the full plan, will it reduce healthcare costs and will it do so over time?” Meadows said, according to the Post. “And when will we see the repeal of Obamacare insurance mandates if this is enacted?”
Rep. Justin Amash (R-Mich.) called the American Healthcare Act “ObamaCare 2.0” in a tweet last night.
“Still have not seen an official version of the House Obamacare replacement bill, but from media reports this sure looks like Obamacare Lite!” tweeted Sen. Rand Paul (R-Ky.).
Four GOP senators from states that opted into the Obamacare Medicaid expansion said they would oppose any plan that would leave millions of Americans uninsured.
“We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states,” Sens. Rob Portman (R-Ohio), Shelley Moore Capito (R-W.Va.), Cory Gardner (R-Colo.) and Lisa Murkowski (R-Alaska) wrote in a letter to majority leader Sen. Mitch McConnell (R-Ky.).
For their part, Democrats were united in their opposition to the GOP proposal.
Reps. Richard Neal (D-Mass.) and Frank Pallone Jr. (D-N.J.) said the plan “would rip healthcare away from millions of Americans.”
The measure was “drafted in secret, and introduced less than 2 days before our committees are scheduled to mark it up,” they said.
House minority leader Rep. Nancy Pelosi (D-Calif.) said the plan shouldn’t go any further until the Congressional Budget Office has a chance to review the bill.
“The American people deserve to see what Republicans are trying to do to their health care,” Pelosi said.
“Paying for all this is going to be a big issue,” said Joe Antos of the American Enterprise Institute think tank. “It’s possible that CBO (the Congressional Budget Office) is going to say the Medicaid reductions aren’t enough to offset the revenue losses from repealing all the taxes.”
“Trumpcare doesn’t replace the Affordable Care Act, it forces millions of Americans to pay more for less care,” added Sen. Chuck Schumer (D-N.Y.).
Material from Reuters was used in this report.