The White House will not support repeal of the medical device tax, Dept. of Health & Human Services Secretary Kathleen Sebelius said during a House hearing this week.
House Rep. Larry Bucshon (R-Ind.) asked Sebelius why the Obama administration continues to oppose repeal of the medtech tax despite "overwhelming support" from Congress. He cited the Senate’s bipartisan, non-binding 79-20 vote to repeal the medical device tax as well as last year’s House vote as evidence of Congress’ willingness to strike the levy.
"Congress has not yet fully passed legislation [to repeal the tax]," Sebelius responded. "I would also say that Congress voted to put the medical device tax in place – that was signed into law."
Bucshon’s home state of Indiana has a large medtech contingent, among them Cook Medical which has been an active voice in the efforts to repeal the medical device tax.
"Indiana is home to over 300 medical device companies with an economic impact of over $10 billion per year, and the medical device tax in the Affordable Care Act is damaging the industry," Bucshon said during the hearing. "Cook Medical has decided not to expand within the state. OrthoPediatrics in Warsaw, Ind., has shelved 2 products for children."
Sebelius responded that that medical device companies stand to benefit from healthcare reform as millions of new patients gain access to insurance and thus to procedures and services that require medical technology.
"What we’re hearing from the medical device industry is just the opposite," Bucshon parried. "They don’t expect more patients, so to speak, to make up the difference. I would urge the administration and yourself to re-look at the medical device tax as a way to fund the Affordable Care Act."
The so-called “windfall” rhetoric has been a staple of the battle over the medical device tax, with proponents arguing that medtech companies will offset much of their costs through their new customers and the industry insisting that the newly added customers aren’t the kind that end up needing medical devices.
"Only in Washington could paying a $30 billion tax over the next 10 years be viewed as a windfall opportunity, but that’s exactly the false claim being made," Gail Rodriguez, executive director of the Medical Imaging & Technology Alliance, said in response to similar allegations in May 2012. "MITA continues to oppose the device tax precisely because we believe it creates strong headwinds against an important sector of the U.S. economy."