17 Senate Dems Back a Delay in Device Tax, Obama Says No

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Advocates for the repeal of the 2.3% medical device tax that goes into effect on January 1 got a small boost when 17 Senate Democrats asked for delaying implementation of the tax. However, in an interview with Minnesota's CBS affiliate, WCCO, President Obama said he’d not support a delay, rendering the senators letter largely symbolic.

Among the Senators signing on to the letter were both Minnesota Senators, Al Franken and Amy Klobuchar. The Twin Cities are home to many medical device companies.

It also picked up signatures from a few Senators who’ve supported the repeal of the multiple procedure payment reduction (MPPR) on the professional component of imaging. They included Senator John Kerry (Mass.), Herb Kohl (Wis.), Debbie Stabenow (Mich.) and Robert Casey (Pa.). Also, Senator-elect Elisabeth Warren (Mass.) stuck to her campaign promise to push for a repeal of the tax and added her name.

However, a few days after the letter was delivered to Senate Majority Leader Harry Reid (D-Nev.), President Obama said he would not support a delay because the tax helps fund the Affordable Care Act. His position is that short term pain felt by medical device companies , as well as hospitals and providers, will be made up for by the addition of 30 million more newly insured health care consumers.

“It’s going to be great for business and they’re doing really well right now and they’re going to get 30 million more customers as a consequence, so this additional tax essentially comes back to them as new customers,” the president said.

This is consistent with his position on a repeal. Last summer, when the House passed a bill repealing the tax, the president said he'd veto any such legislation if it somehow made it through the Senate and to his desk.

Needless to say, this is not the position of the medical device companies who will be hit with the tax. The Medical Imaging & Technology Alliance (MITA), a division of NEMA, issued a statement saying the president was "mistaken" in his position on the tax.

“In no way is a $30 billion tax over the next ten years helpful for medical device companies,” said Gail Rodriguez, executive director of MITA, in the statement. “This tax threatens jobs, investment in research and development, and patient access to innovative technologies.”

Read the Democratic senators letter posted by the Wall Street Journal. (PDF)Read a transcript of Obama's interview with WCCO.