Devices & Diagnostics, Policy

House reaches deal on more than $1T spending bill and 2-year medical device tax pause

House leadership approved a two-year suspension of the medical device tax and the Cadillac tax on high-cost insurance plans.

The House reached a deal late Tuesday on a $1.1 trillion spending bill and a big package of tax breaks, including a delay on the medical device tax. The spending bill, however, has not been officially agreed on – Speaker Paul Ryan (R-Wisconsin) reportedly wants to give lawmakers until Friday to vote on it.

The Cadillac tax and the medical device tax will both be delayed for two years, and the law’s health insurance tax will be suspended for one year. The taxes will not be fully repealed, but this is an indication that push-back on Obamacare is materializing – a success for Republicans, although a mostly a bipartisan effort in this case.

Under the current, tentative agreement, the device tax will be suspended until 2017. As The New York Times reported:

Republicans said the device tax discouraged the development and sales of innovative, lifesaving medical technology. Some Democrats from states with thriving medical technology companies agreed. The tax package also includes a one-year delay in a separate annual fee on health insurance providers, one of a number of taxes that help offset the costs of expanding coverage under the Affordable Care Act.

Scott Huennekens, chairman of the Medical Device Manufacturers Assn., said, according to Mass Device, that the medtech tax pause would boost innovation, job creation and patient care.

“MDMA applauds the bipartisan agreement to suspend the medical device tax as a part of the tax extenders package,” said Huennekens, who is also president & CEO of Verb Surgical. “Suspension of this onerous policy will empower med tech innovators to continue developing and delivering the cures and therapies of tomorrow, and will help protect America’s leadership position in this dynamic field.”

“We are extremely appreciative of the bipartisan efforts to include a two-year suspension of the medical device tax in the tax extenders legislation,” AdvaMed chairman Vincent Forlenza, chairman, president & CEO of Becton Dickinson & Co., added in prepared remarks. “Suspending the tax will be an important step in addressing the harmful effect it is having on research and development and continued medical progress. On behalf of America’s medical technology companies, our employees and the patients we serve, we urge Congress to act swiftly on this legislation.”

Photo: Flickr user James Manners

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