The WasteWatcher: The Staff Blog of Citizens Against Government Waste

A Positive Start to Repeal the Medical Device Tax

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On Thursday, June 18, the House of Representatives voted to repeal the 2.3 percent excise tax on total sales for certain medical devices that was created in the Affordable Care Act (ACA).  The legislation, H.R. 160, entitled the “Protect Medical Innovation Act,” passed by a vote of 280 to 140.  All the Republicans and 46 Democrats voted for the legislation.  You can see the vote results here.  The Council for Citizens Against Government Waste (CCAGW) supported the legislation and sent a letter urging House members to support the bill.

Medical device companies have created almost 2 million U.S. jobs, both direct and indirect, and represent one of the nation’s biggest exporters with a positive balance of trade of $42 billion. The vast majority of medical device companies, more than 80 percent, are small businesses with 50 or fewer employees, and the excise tax is causing them to lay off workers and forego hiring new employees.  If the tax is not repealed, it is expected to cost medical device companies $30 billion over ten years according to the Congressional Budget Office.  While it is not a direct tax on consumers, they will pay for it through higher health insurance costs and taxes.

CCAGW members and supporters have been so concerned about the negative effect the medical device tax will have on the industry’s ability to create new and innovative products, they sent more than 2,600 letters to Congress asking for its repeal.

The bill now goes to the Senate where its fate is unknown.  However, in 2013, a non-binding amendment was offered by Senator Orrin Hatch (R-Utah) to the Senate fiscal year 2014 budget proposal, S.Con.Res. 8, that would repeal the device tax.  It passed by a vote of 79 to 20.  All Republicans voted for the amendment as well as 33 Democrats.  That vote can be found here.

Senator Hatch has introduced similar legislation this year, S. 149, the Medical Device Access and Innovation Protection Act.  The key will be to get the 79 senators who voted for his non-binding amendment two years ago to now cosponsor and vote for his new legislation or the House bill.  There will be plenty of pressure put on senators to do so.

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