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.
