House votes to repeal medical device tax

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The House voted Thursday to repeal the medical device tax that was included in the Affordable Care Act.

The House passed H.R. 160, the Protect Medical Innovation Act, by a vote of 280 to 140. The bill was introduced by Rep. Erik Paulsen (R-Minn.), a member of the tax-writing House Ways and Means Committee.

The bill aims to repeal the 2.3% excise tax on medical devices, such as pacemakers and operating-room monitors, which was included in the health care reform law. The legislation now heads to the Senate where repealing the medical device tax also has bipartisan support. A nonbinding vote to repeal the tax has previously received 79 votes.

“As a country, we take great pride in our ability to create, invent, and innovate—especially when it comes to products that improve people’s lives,” Paulsen said in a statement. “The medical device tax stands in direct contrast to this ideal, which is why you’ve seen Members of Congress from across the political spectrum support its repeal. It’s time to push this legislation across the finish line and support American jobs and innovation.”

Paulsen highlighted the effect the tax has had on a number of companies that manufacture medical devices. Because the tax is on sales instead of profit, one small business in his district is paying an effective tax rate of 79%. Paulsen spoke in favor of the legislation on the House floor.

“This tax is a prime example of Obamacare’s flawed priorities,” said House Ways and Means Chairman Paul Ryan (R-Wisc.) in a statement after the bill was passed. “Taxing medical devices not only stifles innovation and threatens American jobs, but drives up health care costs and makes treatments less accessible for those who need them most. By repealing this tax, American medical innovation can refocus on encouraging discovery and finding solutions for the health challenges—and emergencies—so many Americans face. I applaud Rep. Paulsen for his work on this legislation, and I’m proud to support it.”

Rep. Sander Levin (D-Mich.), the ranking Democrat on the Ways and Means Committee, expressed his opposition to the bill during a statement on the House floor Wednesday. “There are certain basic facts here,” he said. “One is that this industry participated in the creation of health care reform. They, like other providers, were involved. And like other providers, they said that they would participate in helping to pay for it. They did so because they understood that they would benefit from the millions of Americans that would gain health coverage under the Affordable Care Act. That’s a fact. And now, they want out. Another fact is that they have benefited from it. According to a recent analysis by Ernst and Young, the industry’s revenue increased by $8 billion in the year the tax took effect. Spending on R&D by the industry increased by 6% in the same year. And the same year, employment increased by 23,500. Another fact is that this applies to imports, as well as those produced in this country, and not at all to exports.”

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