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Republicans Fight To Repeal Medical Device Tax

The Senate rejected a House proposal Monday to repeal the medical device tax that is a mandate in the Affordable Care Act.

heart-rate monitor

Photo: Boyce Duprey (flickr)

The medical device tax applies to a wide range of products including heart-rate monitors and pacemakers.

As Congress debates a budget and Republicans call for the repeal of the Affordable Care Act, a specific part of the health care law remains a point of contention.

The Affordable Care Act mandates a 2.3 percent tax on medical devices and the House of Representatives passed a funding measure Monday that would have repealed the tax.

Governor Mike Pence also weighed in on the issue, calling on the U.S. Senate to agree to the House’ proposal, saying it negatively impacts the medical community, which provides around 20,000 jobs.

The House’ proposal was quickly shot down in the Senate, but medical companies in Indiana are still holding out hope.

“You’ve seen layoffs at many medical device companies, and you’ve seen those companies transferring jobs to facilities in other parts of the world,” says Dan Peterson, Vice President for Industry and Government affairs for Cook Medical in Bloomington.

Peterson says that Cook fully supports the repeal of the medical device tax.

But Paul Van de Water, a senior fellow with the Center on Budget and Policy Priorities in Washington, says the Affordable Care Act will provide health insurance for as many as 25 million people, and the medical device tax is being used to pay for the expanded medical coverage.

“One of the important things, first, is that the folks who are objecting the tax tend to ignore the fact that the demand for medical devices is going to increase as a result of the expansion of health coverage the affordable care act will provide,” Van de Water says, adding that the tax applies to medical device products sold in the U.S., whether or not they are manufactured here.

Still Governor Pence says the tax will stunt medical innovation is direct and could lead to the elimination of thousands of jobs.

Democrats have taken different stances on whether they would consider repealing the medical device tax in order to pass a spending bill.

Some have said the repeal would add $30 billion to the deficit, but others have indicated that money could be made up elsewhere.

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