Debt Ceiling Deal Leaves Device Tax in Place

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After a 16-day government shutdown and financial markets being rattled by the United States coming within hours of being unable to pay its debts, the final deal approved by Congress and signed by the President looked much like the one originally passed by the Senate back on September 30.

The only change to the Affordable Care Act was a provision to require additional verification of income claims for enrollment in health insurance subsidies — a procedure some Democrats say is redundant.

Medical device manufacturers had supported efforts by conservative lawmakers to make ending the government shut down and later raising the debt ceiling dependent on lawmakers agreeing to end the 2.3% excise tax on medical devices that helps fund the Affordable Care Act. Ending the tax had bi-partisan support in both the House and Senate and could conceivably have provided a point of compromise as legislators from both parties had device manufacturers in their home districts that were hurting under the tax.

However, between the strong opposition to ending the tax from Senate majority leader Harry Reid (D-Nev) and President Obama, and the greater focus of Tea Party conservatives for defunding or Affordable Care Act completely, the provision was left off the final budget and debt ceiling deal.

Yet it is not all bad news for advocates for ending the tax. The deal creates a special House-Senate budget conference that is tasked with coming up with a fiscal blueprint by Dec. 13. Co-chairing the committee is Rep. Paul Ryan (R-Wis.), who has made no secret of his plan to push for changes to Medicare and Medicaid.

“I want to get a budget agreement that gets entitlement spending under control, that gets a dent on the debt and enacts pro-growth policies to create jobs,” Rep. Ryan told The Hill.

This could open a door for repealing the tax by replacing it with cuts in Medicare and Medicaid, a necessity as conservatives do not want to approve any new taxes and medical device manufacturers have not stepped forward with an alternate option for how to replace revenue that would be lost if the tax was ended.

After the device tax repeal was left out of the final debt ceiling deal, the Medical Imaging & Technology Alliance (MITA) posted a message of support to the members of the House and Senate that had worked to repeal the tax.

“We appreciate the tremendous commitment of the bipartisan group of Members who recognize the impact of the device tax and continue to push for repeal of this harmful tax in both the House and the Senate,” stated Gail Rodriguez, executive director of MITA on the alliance’s website. “MITA encourages Congress to promptly repeal the device tax so that medical innovation and American jobs don’t suffer any longer.”