U.S. Senate Votes to Repeal Device Tax – Again

Persistance may finally be paying off for device tax opponents.

The U.S. Senate voted 53-47 last week to defund several key provisions of the Affordable Care Act (ACA), including the 2.3 percent sales tax levied against the medtech industry since 2013. The bill now goes back to the U.S. House of Representatives for approval before moving on to President Obama’s desk, where it is expected to be vetoed.

House Republicans have voted more than 50 times to repeal or delay the law, which Congress enacted with only Democratic votes. This is the first time the Republican-controlled House and Senate have used a procedure aimed at bypassing a filibuster by Senate Democrats’ to get a bill to the president’s desk. No Democrats voted in favor of the measure, while Republican Senators Susan Collins of Maine and Mark Kirk of Illinois voted against it.

In order to pass the bill with a simple majority of 51 rather than a filibuster-proof 60, drafters of the bill used a tool called budget reconciliation, a fast-tracking process that also prevents any attachments to the bill prior to a vote. While the legislation is not written to repeal the ACA entirely, it does vote to defund several of the ACA’s main sources of funding, including the medical device tax, which many claim has stifled innovation and job growth.

In an editorial published in The Hill, John Eckberg, director of media relations for Cook Group, wrote that the medical device tax was the “dumbest” in the history of public policy, and that it was solely responsible for the loss of 120,000 jobs and $1.8 billion dollars in R&D spending, which has caused innovation to “slow to a trickle.”

Congressional Republicans won’t succeed in undoing the Affordable Care Act, though, because the president has said he would veto the measure and Democrats in Congress have the votes to block an override. The House has passed a similar bill to the Senate, and differences between the two must be resolved before the legislation can go to the president.

Supporters of the Senate bill see its voyage to the White House as proof of its eventual success; many lawmakers believe a new administration is all that is required to repeal the ACA forever.

In October, Paul Ryan (R-Wisc.), the newly elected House speaker, called the bill an opportunity to take a “big step toward dismantling Obamacare,” even though congressional members on both side of the issue fully expect a presidential veto.

“Everybody knows it’s just a gesture of futility,” Senate Democratic leader Harry Reid of Nevada said on the Senate floor during the Dec. 3 vote. “We’re wasting our time here. Everyone knows the result.”

Ryan, however, said Republicans will introduce a plan next year to replace the ACA, though he was vague on specifics.

The U.S. Supreme Court has twice upheld key provisions of the Affordable Care Act. The court on June 25 preserved subsidies that help millions of Americans pay their health insurance premiums. Obama said at the time the law has helped tens of millions of Americans and is not going away.

The bill passed by the Senate would end financial penalties for individuals and companies that don’t follow the law’s requirement that they buy insurance for themselves and their workers. It also would end an expansion of the federal-state Medicaid health program for the poor, though Senator John Cornyn of Texas, the second-ranking Republican, has said the legislation would provide a two-year transition to enable people to find alternative coverage.