House passes medical device tax repeal bill

June 08, 2012
by Brendon Nafziger, DOTmed News Associate Editor
The U.S. House of Representatives voted 270-146 Thursday to repeal an upcoming excise tax on medical devices, in a largely symbolic move by the GOP-controlled chamber. The Democrat-ruled Senate has already said it will not vote on the legislation, according to House Democrats.

The bill, H.R. 436, sponsored by Minnesota Republican Erik Paulsen, calls for abolishing a 2.3 percent excise tax levied on the sale of medical devices. The tax, part of the Affordable Care Act, aims to raise nearly $30 billion over 10 years to help pay for the cost of reform. It goes into effect next year.

The bill was bundled with two others pieces of legislation related to flexible spending accounts; the bills would let people cash out their FSAs at the end of the year, and also buy over-the-counter medicine with FSA dollars. Currently, FSAs can only be used to buy prescription drugs.

The vote for the bill largely fell along party lines, with no Republicans voting against it and only 37 Democrats for it.

Republicans backed the bill by saying it would preserve jobs that would be lost by device manufacturers if they had to bear the 2.3 percent tax. But Democrats, some of whom said they supported the tax repeal in principle, worried about the mechanism the law set aside to fund it. It would erase repayment limits for people who buy insurance through health exchanges but receive "payments larger than the premium assistance credits to which they are entitled," according to a Congressional Budget Office write-up.

Fortney Peter Stark, a California Democrat, said the change would cause 350,000 Americans to become uninsured, citing Joint Committee on Taxation figures.

"I think I've seen the silliest thing in the world, and then I come out here and you've done it again," Jim McDermott, a Democrat from Washington State, said on the floor. He also chided the device industry, which has long called for the tax repeal, for opposing the tax after agreeing to help President Obama with health reform in 2009.

"We're going to let a $100 billion industry pull out of a deal, and pay for it by letting middle class people pay for it by writing a check to the IRS," he said.