GOP-heavy Senate could mean a repeal of the medical device tax

Those itching for a medical device tax repeal are finding hope from the GOP-heavy Senate, and its newly reelected Kentucky Senator Mitch McConnell. Republicans will likely focus their energy on dismantling the 2.3 percent tax on device revenues, according to the Washington Post WonkBlog: Republicans won’t be able to dismantle President Obama’s Affordable Care Act, but they are likely […]

Those itching for a medical device tax repeal are finding hope from the GOP-heavy Senate, and its newly reelected Kentucky Senator Mitch McConnell. Republicans will likely focus their energy on dismantling the 2.3 percent tax on device revenues, according to the Washington Post WonkBlog:

Republicans won’t be able to dismantle President Obama’s Affordable Care Act, but they are likely to push for repeal of key pieces, including an unpopular tax on medical devices sold to hospitals and other medical facilities. Many Democrats are likely to vote with them, leaving Obama to decide whether the tax is worth a veto. They may also try to water down the mandate on employers to provide health insurance coverage, which takes effect next year.

While the ACA has been a Republican target from its very start, there’s been bipartisan dissent when it’s come to the medical device tax. Several Democratic senators, including those in Minnesota, have been openly critical of the tax and supportive of its suspension.

This comes despite frequent reports that the economic impact of the medical device tax has been negligible, including one released yesterday by the Congressional Research Service. According to Modern Healthcare

The CRS researchers estimated that the tax would reduce output and employment in the industry by no more than two-tenths of 1%. This limited effect, according to the report, is due to the small tax rate, the exemption of about half of output, and the relatively insensitive demand for health services.

The analysis suggested that most of the tax will fall on consumer prices, not on device company profits. “The effect on the price of healthcare, however, will most likely be negligible because of the small size of the tax and small share of healthcare spending attributable to medical devices,” the report said.

In any case, this won’t be an easy feat, according to the Star Tribune: 

But repealing the unpopular medical-device tax will not be easy, even with Republican majorities in the House and Senate. Any stand-alone device-tax bill would face a likely veto threat by President Obama, which means repeal is more likely to be a part of a broader bill reforming business taxes or the Affordable Care Act.

“I certainly hope Congress and the White House choose to work together and look at the reform law and in particular the device tax,” said Shaye Mandle, chief executive of Minnesota’s devicemaker interest group, LifeScience Alley, in St. Louis Park. “We are hopeful.”