It’s unlikely that his waning days as chairman of the Senate Finance Committee will see Sen. Max Baucus (D-Mont.) having a "Come-to-Jesus" moment on the medical device tax, but his retirement does change the game on repealing the levy.
The Affordable Care Act (and the 2.3% excise tax on U.S. medical device sales created to help finance it) is the 6-term lawmaker’s crowning achievement, one he has promised to end his career as a lawmaker fighting for.
Baucus, who announced his impending retirement at the end of his term in 2014 yesterday, told Politico that he will "totally stand by" the health law.
"If we had not adopted the ACA, healthcare costs would be going up at a greater rate," he told the website.
The medical device industry also expects Baucus to stick to his guns.
"I don’t anticipate that during the remainder of his tenure, Sen. Baucus is going to support repealing the medical device tax," AdvaMed’s chief lobbyist, J.C. Scott, told MassDevice.com in an interview. "I don’t think that dynamic changes."
So where does the departure of the Big Sky State’s senior senator leave the medical device industry? In the fall of 2009, Baucus, in his role as the lead author of the healthcare law, was faced with a decision on how to pay for the massive reform.
In the then-Democrat-controlled House of Representatives, 1 of the ideas lawmakers floated was an option to pay for reform with a surcharge on millionaires. Raising taxes was, as always, politically tricky and Baucus’ people were wary of walking into their opponents’ most effective rebuttal. A more politically palatable option was offered, namely putting the burden of paying for healthcare reform on the industries that would theoretically benefit the most from the reforms. The rationale was that the millions of uninsured who would be entering the system would drive huge gains for healthcare stakeholders like the medical device industry.
Although the medical device industry was successful in knocking back the total impact of the levy before its enactment in 2010, and has gathered much support for repeal since then, there’s no sign that Baucus would ever put his signature achievement in jeopardy by defunding it in any way.
Nor has the power structure of the Senate changed with Baucus’ announced retirement, at least for the immediate future. He’s still chairman of 1 of the most powerful groups in the federal government, the Senate finance panel, a position he’ll hold through the mid-term elections of 2014. It’s unlikely that his influence over other members of his party will diminish much as long as he holds the Upper Chamber’s purse-strings.
But here’s where it gets interesting: If Democrats retain control of the Senate (by no means a sure thing), the next in line for Baucus’ chairmanship is Sen. Ron Wyden (D-Ore.); behind him sits Sen. Charles Schumer (D-N.Y.). Both legislators have been supportive of repealing the medical device tax, voting in favor of a symbolic repeal last month.
And if Republicans take control of the Senate, they’ve made no secret of their disdain for Obamacare and the taxes created to fund it. In that scenario, repeal of the medical device tax becomes more than a likelihood.
But for now, the medtech sector is optimistic that the winds are changing, even as industry leaders downplay the impact of Baucus’ retirement.
"The [repeal] effort has never been about any particular member of congress," AdvaMed’s Scott told us today. "We’ve had a cordial and professional relationship with the senator and his team. Certainly there has been disagreement over the medical device tax and we’ve talked to them directly about it. They’ve always had an open door for us to come in on this issue."
Scott reiterated that the game plan for repealing the tax still involves rolling it into a corporate tax reform plan or another, broader package. As a leader in the tax reform charge, Baucus’ support will still be critical.
"Normally they’re looking at bigger packages," Scott said. "There are very few stand-alone bills in the Senate."