Would the Death of Obamacare Be a Medtech Victory?

Republicans moved a step closer to sending the Affordable Care Act (ACA), otherwise known as Obamacare, to the grave Thursday. That effort would also effectively kill the 2.3% tax on U.S. medical device revenue, which would be seen as a big win for the medtech industry.

But should the fate of the device tax really be tied to the broader, and arguably more controversial, bill known as the American Health Care Act (AHCA)? The AHCA fell flat in March, and the House of Representatives only passed it by a narrow margin (217-213) Thursday after a series of deals and amendments. Now the bill will go to the Senate, where it will likely undergo another round of changes.

The proposal to permanently do away with the medical device excise tax is only a small piece of that larger puzzle, and seems to have strong support from both sides of the aisle. A recent blog that Scott Whitaker, president and CEO of AdvaMed, wrote for RealClear Health suggests that it might have made more sense for lawmakers to deal with the device tax separately. 

"The tax is different from other ACA-related taxes, and deserves separate consideration," Whitaker wrote. "It's not grounded in any health care policy, it's not linked to coverage, and it's not in the best interest of patients."

Congress passed a two-year suspension of the tax two years ago, and Whitaker said the industry has already benefited from that temporary victory. Companies have been able to invest that money back into research and development, partnerships, and expanding workforces, he noted. 

"But in our industry, long-term certainty is paramount," Whitaker wrote. "Without permanent repeal, our companies will struggle a bit more to commit the resources necessary to see the innovation process through."

Nadim Yared, AdvaMed's new chairman, said recently that the organization's top priority is to ensure that the device tax is repealed, "no matter what form."

"We cannot allow this tax to be re-imposed on our industry," Yared said. "We have seen the negative impacts when this tax was in place. We lost nearly 29,000 jobs in our industry, that's 7% of our worforce.

Amanda Pedersen is Qmed's news editor. Contact her at [email protected].

[Image courtesy of Pixabay]