The Washington Post

House votes to repeal ‘medical device tax,’ but Senate unlikely to agree

House Republicans plan to hold votes on several bills meant to repeal elements of the 2010 health-care law. (J. Scott Applewhite/AP)

The Health Care Cost Reduction Act of 2012 would repeal a 2.3 percent excise tax on gross sales receipts in excess of $5 million for manufacturers and importers of certain medical devices, including defibrillators, pacemakers and prosthetic limbs. Congressional budget officials estimate that the tax set to take effect Jan. 1 would raise nearly $30 billion in revenue between 2013 and 2022.

Even though the bill has passed the House, it has no hope of consideration in the Senate.

Republicans backing the bill cite a study by the $140 billion medical device industry that warns that the tax could result in higher prices for some medical devices and the loss of up to 43,000 manufacturing jobs.

The White House said it opposes repealing the tax on medical device manufacturers because it would pass the law’s costs off to low- and middle-income Americans.

The legislation is the first in a series of measures set to be debated and voted on this summer by the GOP-controlled House in an effort to address Republican opposition to the law derided by critics as “Obamacare.” The vote comes just weeks before the Supreme Court is set to rule on its constitutionality.

The vote also comes on the same day that a new New York Times/CBS News poll finds that more than two-thirds of Americans hope the high court will strike down some or all of the health-care law. More than 70 percent of independent voters want some or all of the law struck down and a majority said they hope to see the entire law overturned. About two-thirds of Republicans said the law should be overturned; 43 percent of Democrats said all of the law should be upheld.

Congress already has repealed other parts of the law in a bipartisan fashion, including a provision that would have expanded the range of purchases that businesses must report to the Internal Revenue Service and a “glitch” that would have allowed up to 3 million middle-class Americans to enroll in Medicaid.

But this repeal proposal is unlikely to survive Senate consideration.

“Can’t the Republicans find a new script rather than trying to attack the health-care bill?” Senate Majority Leader Harry M. Reid (D-Nev.) said this week when asked about it. “That’s all that is, it has nothing to do with anything other than that. I’m not looking forward to doing this.”

The Post’s N.C. Aizenman reported last week, at least three firms have announced layoffs in anticipation of the tax, including a Michigan-based manufacturer of hip and knee replacements that plans to cut 1,000 jobs, or 5 percent of its workforce.

Representatives of the roughly $140 billion industry say that is a particularly heavy burden for a sector where innovation is often driven by start-ups.

This story has been updated.

Ed O’Keefe is covering the 2016 presidential campaign, with a focus on Jeb Bush and other Republican candidates. He's covered presidential and congressional politics since 2008. Off the trail, he's covered Capitol Hill, federal agencies and the federal workforce, and spent a brief time covering the war in Iraq.


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