The Patient Protection and Affordable Care Act (“PPACA”) (P.L. 111–148) included a medical device excise tax of 2.3%, which took effect in January 2013, and is estimated to impact more than 8,000 medical device manufacturers throughout the United States. Despite broad, bipartisan support among Members of Congress to repeal the tax, legislative activity in this area has slowed to a crawl. The sense of urgency that accompanied prior repeal efforts from last year, before the tax went into effect, has greatly diminished. Thus, the medical device excise tax is expected to remain in place for the foreseeable future. Whether the tax is ultimately repealed will likely be decided as the Congress takes up comprehensive tax reform.
The issue, however, has not been completely forgotten. On August 1st, the House Republican Freshman sent a joint letter to the House Republican leadership urging the House to move forward with a standalone bill (H.R. 523), the Protect Medical Innovation Act, that would repeal the tax. The House Republican Freshman Class President Luke Messer (R-IN) emphasized that the freshman, “stand ready to work with House Leadership and Chairman Camp to repeal this tax this year and protect medical innovation, preserve patient access to care, and save American jobs.”
Even the House Republican Freshman letter recognizes, however, that House Ways & Means Committee Chairman Dave Camp (R-MI) has identified the medical device excise tax as an issue to be considered in the larger comprehensive tax reform package currently being developed. As comprehensive tax reform takes shape, efforts to move the standalone bill through the House have diminished. As Republicans and Democrats begin to negotiate their respective tax priorities, it remains to be seen whether the broad, bipartisan support demonstrated so far by Members of Congress will be enough to ensure the inclusion of a medical device excise tax repeal in the final tax reform package, especially in light of the ongoing threat by the White House to veto any legislation that seeks to undermine the PPACA.