The medical device industry lobby is hoping to leverage a nearly unanimous U.S. House of Representatives vote to repeal the so-called “Cadillac Tax” on high-end health insurance plans into a repeal of the medical device tax.
The House moved this week on a 419-6 vote to approve H.R.748, “The Middle Class Health Benefits Tax Repeal Act of 2019,” killing a a 40% excise tax on expensive healthcare plans enacted in 2010 as part of the Affordable Care Act.
It’s unclear whether the Senate will take up repeal of the Cadillac tax, which never went into effect, The Hill reported.
Obamacare put another excise tax in place, although it was only in effect for two years: the medical device tax, which imposed a 2.3% levy on U.S. sales of prescribed medical devices. After it went into place in 2013, legislators suspended it in a series of moratoria beginning in 2015, the latest of which is slated to lapse at the end of this year.
The lower chamber’s move to do away with the Cadillac Tax prompted immediate calls from the D.C. medtech lobby for a similar move on the medtech tax.
“MDMA fully agrees with the House of Representatives that when a policy is bad for patients and stifles access to health care, action needs to be taken. This is why it is critical that Congress quickly takes steps to permanently and fully repeal the medical device tax,” Medical Device Manufacturers Assn. president & CEO Mark Leahey said in prepared remarks. “There is broad, bipartisan and bicameral agreement that the device tax is bad for patient care and job creation, and unfortunately this policy has already caused damage to the innovation ecosystem that can never fully be repaired. We urge Congress to ensure that the punitive measures caused when the device tax was in place never happen again, and MDMA remains committed to working with the growing bipartisan majority who agrees.”
“Today’s House vote sent a clear message that taxes on our health care system are a bad idea – and that the case for keeping the medical device tax in place no longer holds water,” AdvaMed president & CEO Scott Whitaker said in a July 17 statement. “A strong bipartisan majority of members in both chambers supports full repeal of the medical device tax – and really, after today’s vote on the Cadillac tax, it’s not possible from either a tax or health policy perspective to justify this onerous tax.”