Medical device tax axed in latest budget proposal from bipartisan legislators

Led by the bipartisan efforts of U.S. House Reps. Charlie Dent, R-Pa., and Ron Kind, D-Wis., a group of 20 self-proclaimed “pragmatic” Republicans and lawmakers from the New Democrat coalition introduced a budget proposal that would finance the government for six months in exchange for the repeal of the 2.3 percent medical device tax included in the Patient Protection and Affordable Healthcare Act. The tax has been unpopular with legislators on both sides of the aisle and many of their constituents in the healthcare field—including veterinarians.

Although veterinary healthcare is not addressed in the Affordable Care Act, equipment intended for human use but also used in veterinary medicine—such as IV fluid pumps, endoscopes and cardiac monitors—will be taxed. The tax is designed to raise $29 million in 10 years to help fund the Affordable Healthcare Act.

Some have said that when based on a procedural basis, the tax would cause only marginal additional costs to buyers. However, the American Veterinary Medical Association (AVMA) has said the tax could increase the cost of providing veterinary medical care prohibitively. In the AVMA’s most recent legislative agenda, the association outlined its support for the Device Access and Innovation Protection Act, which was created to repeal the medical device tax. The bill, introduced Feb. 7 by Sen. Orrin Hatch, R-Utah, is now in committee.

U.S. House Veterinary Caucus member Ted Yoho, R-Fla., a former veterinarian and first-year congressman, is not a co-sponsor of Hatch’s bill. He would prefer to repeal the Affordable Healthcare Act all together. As part of the conservative bloc of Republicans currently digging in their heels to tie defunding or delaying “Obamacare” to a budget resolution, Yoho has warned if the medical device tax isn’t repealed, domestic medical device manufacturers will move offshore.

Kind told the media Thursday that supporters of the bipartisan proposal were working to find a way to generate the money lost by the eliminating the medical device tax. Reportedly in a draft letter to House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif., the group proposed offsetting the tax by extending a pension stabilization provision that was included in the transportation authorization bill previously passed by the Senate. But with an increasingly tense, partisan environment on Capitol Hill right now, Dent acknowledged the proposal would be a hard sell.

However, Friday morning, it was reported that Sen. Lindsey Graham, R-S.C., approached Sen. Charles E. Schumer, D-N.Y., in an attempt to open talks of compromise also based on the medical device tax.