On January 6, Congressman Erik Paulsen (R-MN) introduced a bill in the U.S. House of Representatives to repeal the medical device excise tax imposed on device manufacturers and importers under the Affordable Care Act (ACA). H.R. 160, the Protect Medical Innovation Act of 2015, has received support from more than 250 co-sponsors, including 17 Democrats.
According to a statement by Rep. Paulsen, H.R. 160 is similar to a bill introduced in the House of Representatives in 2013 that also sought to repeal the medical device excise tax. That bill passed the House of Representatives, but was not brought for a vote in the Senate. The Senate did pass a non-binding resolution in 2013 opposing the tax. No date has been set for a vote on H.R. 160.
Section 4191 of the Internal Revenue Code, which was enacted by the Health Care and Education Reconciliation Act of 2010 amendment to the ACA, imposes a 2.3% excise tax on the sale of certain taxable medical devices by manufacturers and importers of the devices. The tax became effective on January 1, 2013. Section 4191(b) defines “taxable medical devices” as any devices, as defined by section 201(h) of the federal Food, Drug, and Cosmetic Act, that are intended for humans, excluding, among other things, eyeglasses, contact lenses, hearing aids, and medical devices “generally purchased by the general public at retail for individual use.”
The Republican party identified the repeal of the excise tax as one of its legislative priorities when it obtained a majority in both houses of Congress in the 2014 elections. The medical device industry and its trade organization, the Advanced Medical Technology Association (AdvaMed), supports the proposed repeal.
The excise tax was previously discussed here.