The medical device industry, including companies that make dialysis equipment and supplies, has made it clear it would like to eliminate the medical device tax, saying it stunts R&D. Congress is listening.
The device tax, which levies a 2.3% tax on sales of medical devices, is embedded in the Accountable Care Act to help subsidize payments for individuals enrolled in health care plans via state and federal exchanges. The Obama administration has said the tax is a key component of funding for the ACA, generating an estimated $30 billion over the next 10 years, and not an undue burden on the industry.
Congressional Republicans think they have the votes to repeal the levy. The House has already voted to repeal the tax, and Senate Republicans are weighing the best timing for a vote to undo the levy. Congressional opponents say they would only vote for the tax’s repeal if there was a way to offset the $30 billion in revenue going to help pay for the ACA.
The industry argues lifting the tax would make it cheaper to produce medical devices and it has found support from Democrats whose states are home to medical-device companies. But proponents of the tax say the industry has benefitted from more patients getting needed treatment through the ACA, and the device industry should pay a share of those profits from the additional sales.