Medical device industry advocates AdvaMed, along with large device companies, have spent considerable resources lobbying against the medical device excise tax and then lobbying for repeal, and with the new Republican-controlled Congress they just might get it.
According to a Politico report, there is bipartisan report for the 2.3 percent excise tax repeal since several large device companies are based in states with Democratic representatives. But the GOP would see this as an even bigger win; the tax is meant to fund the Patient Protection and Affordable Care Act initiatives and a repeal would put a significant dent into the law’s financial support and effectiveness.
Here are eight quick things to know:
1. Repealing the medical device excise tax would remove $26 billion of PPACA financing over the next 10 years and there currently isn’t a clear way to replace it.
2. A few “firebrand” liberals from Massachusetts have spoken out against the tax but haven’t signed onto the bill for repeal. Both Senators Elizabeth Warren and Ed Markey could support repeal.
3. Democratic senators Al Franken and Amy Klobuchar from Minnesota, where Medtronic is located, have sponsored a bill for repeal along with three other Democrats and five Republicans.
4. Some Democrats that support the bill are looking for ways to offset the costs, including making the bill to repeal part of a larger package or fitting it into a larger tax bill.
5. In addition to medical device companies, PPACA also tapped drug companies, hospitals and health insurance companies to fund the legislation since these entities would “benefit” from expanded healthcare coverage. However, Congress is only considering repeal for the medical device excise tax at this time.
6. Industry lobbying efforts were already successful in changing the tax from a set amount to a percentage of sales, and allowing companies to deduct PPACA-related fees from their taxes. As a result of these changes, the overall amount the tax would bring in from $60 billion to $26 billion.
7. AdvaMed spent $2.4 million in 2013 and 2014 lobbying for repeal.
8. The medical device industry as a whole spent $30 million on lobbying efforts annually for the past four years. Last year Medtronic spent more than $5.3 million on lobbying for repeal.