Medical Device Tax Proposal Repealed by Lawmakers

January 28, 2015
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The tides may be changing in regards to medical device tax in Obamacare…

On Jan. 7, a bipartisan group of lawmakers forecast the U.S. House of Representatives would finally succeed in its efforts to repeal the medical device tax component of Obamacare, after pushing this agenda for years.

New bill wins support of House

The latest legislation floated to repeal this provision, a bill that Rep. Erik Paulsen, R-Minn. introduced Jan. 6, has managed to secure the support of most of the House’s members, including Democrats, according to The Hill. This momentum has built up after Republicans contended for months that if they managed to win control of the legislature, eliminating this tax would be one of their primary objectives. “Many of us were saying from the outset this is a very ill-conceived idea,” Paulsen stated during a news conference Jan. 7, the media outlet reported. “You’re going to have fewer start-ups, less ideas in the garage.”

Previous initiatives

The congressman, who just began his fourth term in Congress, has repeatedly proposed bills that would eliminate this provision, Washington Correspondent Brett Neely recently wrote in MPR News. While his legislation obtained the House’s approval twice since 2012, the initiative tasted defeat upon reaching the Senate. However, the situation may prove different this time, as the bill failed to pass the Senate when the legislative body was controlled by Democrats, Neely emphasized. His latest bill commands the support of 257 members of the House, and the Democrats who support the initiative have indicated they are behind the measure because they want to benefit medical device companies in their districts. “Repealing this tax has strong bipartisan support across the political spectrum,” he said at the conference Jan. 7, the author wrote. “We’ve been in the red zone before but now with new Senate leadership, we’re confident we can get it across the goal line.”

Tax revenue concerns

While Paulsen may be optimistic about the effort’s prospects, supporting lawmakers could run into trouble if they are unable to find methods of offsetting the revenue lost by eliminating the tax, according to The Hill. The provision currently generates close to $30 billion over the course of 10 years. However, Paulsen has indicated he isn’t worried about that hurdle, and both he and Rep. Ron Kind, D-Wis. have predicted that members of the House and Senate – Democrat and Republican alike – will find a way to cover the lost revenue, the media outlet reported. Paulsen emphasized that the House has done that before, approving legislation in 2012 that would have recovered subsidy overpayments from Obamacare and used that to pay for the income shortfall. In the event that the legislature can come to an agreement, a final hurdle remains. Currently, it is unclear whether Pres. Barack Obama would veto the proposal should it come to his desk. Obama has previously threatened to veto the medical device tax repeal, The Hill noted.