US House of Representatives Approves Legislation to Repeal the Affordable Care Act’s Medical Device Tax, Bill Awaits Senate Action

On July 24, 2018, the House of Representatives approved 283-132 a bill (H.R. 184, the Protect Medical Innovation Act of 2017) to repeal the excise tax on the sale of a medical device by the manufacturer, producer, or importer.

The bill repeals the 2.3 percent excise tax on certain medical devices that was established in the 2010 Affordable Care Act as one of a number of revenue-raising provisions to finance health care reform. The tax had been imposed for a while after ACA enactment, but stakeholder concerns about its adverse impact on device manufacturers and innovation led Congress to delay implementation. The tax has already been delayed twice, including a two-year delay which was included in the funding deal that ended January’s government shutdown, however HR 184 would permanently repeal it. The excise tax on medical devices is already delayed for 2018 and 2019.

While the Senate is scheduled to be in session for most of next month, it is not certain that the Senate will consider HR 184 or the Senate version (S.108) authored by Senator Orrin Hatch (R-UT), as a standalone bill. However, there is always the chance that the bill is added to a tax extenders package later this year. HR 184 does not include an offset, so in order to comply with House and Senate rules, Congress must find a way to offset the lost revenue from repealing the excise tax.

The legislation passed with 283 yes votes, including 57 Democrats and all but one Republican. House Republicans are eager to showcase legislative successes ahead of their August recess and this year’s mid-term elections, and this is a strong example for the bill’s lead author, Rep. Erik Paulsen (R-MN) and other bill supporters, including 279 cosponsors, to tout during recess events.

“Passage of the House legislation is fueling a fresh effort to build a bipartisan coalition in the Senate to repeal the medical device tax, seen as a drag on medical innovation and new healthcare technology. Clearly the momentum is now behind repeal. However, the elimination of the tax is still dependent upon what other issues are paired with it, and the winding down of the congressional calendar. If the Senate fails to take up the medical device tax in September, its fate may be decided in lame duck session or tied to the disposition of a new Congress,” noted Arent Fox Senior Advisor and former US Congressman Phil English.

More detailed information is available in the press release from House Ways and Means Committee Chairman Kevin Brady. 


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