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Congress considers new effort to repeal medical device tax

By: Gayle S. Putrich

January 16, 2014

WASHINGTON — For some in Congress, a new year means a new effort to get rid of the medical device tax.

As part of his effort to extend unemployment insurance nationwide, Rep. Charlie Dent (R-Pa.) introduced a measure on Jan. 15 that includes a repeal of the 2.3 percent excise tax on medical device that was part of the 2010 Affordable Care Act.

The latest crack at removing the tax comes after the Fiscal Year 2014-2015 budget agreement approved and signed in the last few days of 2013 included language passed in a bipartisan but non-binding Senate vote allowing a repeal of the tax — provided lawmakers can find somewhere else to make up the lost government revenue.

Dent staffers say the proposed bill, co-sponsored by Rep. Mark Meadows (R-N.C.), does include ample offsets, including savings from eliminating the "double dip" that allows some to collect both unemployment and disability checks and cracking down on fraudulent Child Tax Credit claims. It also would strike the 30 hour work week currently stipulated in the health care law's formula and replace it with a 40-hour threshold and approve construction of the Keystone XL pipeline.

The unemployment extension bill "ties the need for immediate assistance with policies that we know will either create new opportunities for workers or save jobs from being eliminated," Dent said in a statement, and is expected to draw bipartisan support.

The measure copies the language of a stand-alone medical device tax repeal bill introduced in 2013 by Rep. Erik Paulsen (R-Minn.) that never taken up by the powerful House Ways and Means Committee; Paulsen's bill garnered co-sponsorships from 227 Republicans and 42 Democrats.

Medical device manufacturers say the newly enforced tax — applied to any device sold to a hospital or medical provider, from MRI machines to heart valves to catheters and expected to generate about $30 billion over the next 10 years — is already costing them more than money.

Medical technology giant Stryker Corp., based in Kalamazoo, Mich., laid off 1,000 workers with Stryker President and CEO Kevin A. Lobo stating that the layoffs were directly related to the increased costs of the device tax. And Bloomington, Ind.-based Cook Medical, Inc. has scuttled plans for five new plants that would have employed about 200 each in the face of a higher tax bill.

Dent and Meadows say the repeal could save as many as 43,000 jobs now at risk in the U.S. medical device field because of the tax.