Bill Would Repeal ‘Job-Killing $20 Billion Medical Device Tax’

WASHINGTON — Rep. Erik Paulsen, R-Minn., introduced
legislation Wednesday “that would immediately repeal the
job-killing $20 billion medical device tax,” according to a press
release from his office. H.R. 5095, called the Defend Medical
Innovation Act, has 26 original cosponsors.

The tax was included as a provision of the Patient Protection
and Affordable Care Act (PPACA), the nation’s recently passed
health reform law.

“The medical technology industry is an American success story,
responsible for life-saving technologies and tens of thousands of
jobs in Minnesota alone,” said Paulsen, who is co-chair of the
House Medical Technology Caucus. “Once it takes effect, this tax
will harm job growth, slow innovation and raise costs. The right
thing to do is stop this tax now, before its negative impact takes
hold.”

PPACA imposes a 2.3 percent sales tax on medical devices to
begin in 2013. The tax is estimated to raise $20 billion
over 10 years.

The provision exempts eyeglasses, hearing aids and other devices
deemed a “retail” item purchased for individual use. But according
to Cara Bachenheimer, senior vice president of government relations
for Invacare, Elyria, Ohio, details of the new provision are
“really not 100 percent clear.

“There remains the possibility that DME items will be exempt
under the ‘retail’ exemption, but we will have to await the
Secretary’s determination of what products will be classified as
‘retail.’”

Paulsen offered an amendment that would have removed the tax
before a final vote on the health care reform bill, but in the end,
Republicans were unsuccessful in attempts to eliminate the tax.

Representatives of the American Association for Homecare have
met with legislative staffers “to oppose any efforts in the Paulsen
bill to target the HME sector for additional cuts” as offsets that
would pay for the revenue lost by abolishing the tax, the
organization’s newsletter said.