While the US House of Representatives recently voted to repeal the medical device excise tax imposed by a 2010 amendment to the Affordable Care Act, there is no sign that the Senate will vote on this issue any time soon.
The US House of Representatives passed the Protect Medical Innovation Act of 2018 in a 283–132 vote on July 24. The Protect Medical Innovation Act is another attempt to permanently repeal the medical device excise tax imposed by the Health Care and Education Reconciliation Act of 2010, which was an amendment to the Patient Protection and Affordable Care Act (Affordable Care Act). If enacted, excise tax repeal will serve as a significant victory for the medical device industry.
As we previously discussed, the Affordable Care Act included tax provisions on certain healthcare industries to help offset the costs of the legislation. One such provision was a 2.3% excise tax on medical device sales.
After several unsuccessful attempts at permanent repeal of the excise tax, Congress was able to agree to a two-year moratorium under the Consolidated Appropriations Act of 2016. The moratorium began on January 1, 2016, and ended December 31, 2017. Congress then extended the moratorium for an additional two years until December 31, 2019.
Senate Vote and Next Steps
As of this writing, there is no sign that the Senate plans to debate or discuss the excise tax repeal any time soon. However, unlike previous efforts for permanent repeal in 2013 and 2015, medical device excise tax repeal may have the support it needs to pass in the Senate this time around. On January 10, 2018, Senators Elizabeth Warren and Edward Markey of Massachusetts introduced the No Taxation on Device Innovation Act to repeal the excise tax; it is currently with the Senate Committee on Finance.