The likely demise of Republican plans to repeal Obamacare and replace it with their own version of healthcare reform has the medtech industry casting about for another way to get a repeal of the medical device tax into law.
The U.S. House and Senate version of the Trumpcare legislation would have, among other things, done away with the 2.3% levy imposed on U.S. medical device sales by the Affordable Care Act in 2013. During the three years it was in effect (a two-year moratorium went into effect at the beginning of last year), the tax brought in $5.3 billion, well short of the $8.7 billion it was expected to bring in to IRS coffers. Repealing the tax is predicted to cut nearly $20 billion in revenues from the federal budget from 2018 to 2026.
And although Republican leaders and the White House are pushing for a procedural vote on Trumpcare as early as tomorrow, it’s unclear whether majority leader Sen. Mitch McConnell (R-Ky.) can muster enough support for a win – or even what the vote would be about.
That has the medtech industry mulling alternatives for repealing the tax, including upcoming bills on the FDA user fee deal, reauthorizing the Children’s Health Insurance Program, an omnibus budget bill next year or an expected bid to reform the tax code.
“I’m frustrated,” AdvaMed CEO Scott Whitaker told the Minneapolis Star Tribune. “The medtech industry is frustrated, because if Congress doesn’t do something, a tax increase is looming.
“We’ll let it play out for the next couple of days and see what the Senate does,” Whitaker told Modern Healthcare. “But we’ll pivot to any moving vehicle. We’re not going to give up.”
That said, another temporary reprieve lacks appeal, he told the newspaper.
“While we’d be grateful for anything beyond a tax increase,” Whitaker said, “that’s not the right health policy or tax policy solution.”
And other lobbyists said tacking healthcare-related measures onto non-healthcare legislation is problematic.
“The industry taxes are a little more difficult to repeal outside of healthcare reform,” GOP healthcare lobbyist Dean Rosen told Modern Healthcare.
“It’s well within reason that one or more of these taxes could be included in a bipartisan tax reform bill a year from now, but it’s a steep road,” added Democratic healthcare lobbyist Billy Wynne, noting that the current repeal-and-replace effort “was definitely their best chance to get this done.”
Rep. Erik Paulsen (R-Minn.), a longtime champion of repealing the medical device tax, told the Star Tribune that he still believes that “the pieces will fall together” for repeal, pledging to “explore every opportunity for permanent repeal.”
“Everyone recognizes this is bad policy,” Paulsen said, calling repeal “a no-brainer.”
Sen. Al Franken (D-Minn.) said he has no plans to offer a repeal amendment to the user fee bill, focusing instead on lowering drug prices. A spokeswoman for Sen. Amy Klobuchar (D-Minn.) told the paper that “in addition to a series of amendments to lower prescription drug costs this year, the senator will seek to include the permanent repeal of the medical device tax in legislation” but noted that the user fee bill so far “did not include the permanent repeal of the tax and it is unclear how many amendments will be allowed when it comes to the Senate floor.”