Efforts to repeal the medical device tax have gained unprecedented ground, with Senate Republicans emerging from a White House meeting saying that President Barack Obama is willing to consider changes to the levy.
President Obama ceded that the levy, a 2.3% excise tax on U.S. sales, is "not part of the core program" of the Affordable Care Act, long-time device tax repeal advocate Sen. Orrin Hatch (R-Utah) told reporters today. The president will consider changes to the medical device tax after federal budget negotiations have met with a resolution, meeting members added.
"He sees progress, but we’re a long way from agreement," Senator John McCain added, according to a Bloomberg report. "I don’t know if you would call it negotiations so much as more serious discussions."
The comments come amid a stark turn-around in the White House’s rhetoric, following months of stark refusal to consider repeal of the tax, which is slated to raise about $30 billion over 10 years to support healthcare reform. New proposals to end the stalemate over the federal debt ceiling have continued to tie spending measures to repeal of the device tax.
The Obama administration has on several occasions said that medical device tax repeal is a non-starter, maintaining that the levy represents the medtech industry’s fair burden in helping to fund healthcare reforms that will bring them more customers. The so-called "windfall" rhetoric has been a staple of the battle over the medical device tax, with proponents of the tax arguing that medtech companies will offset much of their costs through their new customers and the industry insisting that the newly insured aren’t the kind that end up needing medical devices.
The White House said for the 1st time this week that it would consider repeal of the levy, as long as lawmakers could come to terms on some means of making up for the lost revenue. The issue of a so-called "pay-for" to make up for the lost revenue the medical device tax is projected to generate has been a sticking point for many Democrats.
The last pay-for, proposed in June 2012 by GOP leaders ahead of a House vote, aimed to take a stronger hand in recouping over-paid health insurance tax credits granted to families. The measure was met with much consternation from Democrats, many of whom said they would have supported a device tax repeal bill if the cost didn’t fall on families.
Other pay-for proposals floated by lawmakers seek to make up for the lost revenue by cutting tax breaks for big oil and gas companies.