Pressure turns to Senate after House passes device tax repeal bill

As expected, the U.S. House of Representatives voted by a wide margin Thursday afternoon for a bill that would repeal the 2.3% medical device industry excise tax. Here's the tally: 270 in favor (including 37 Democrats); and 146 opposed.

The vote came after months of furious lobbying by medical device groups and companies who said the tax would kill jobs and hamper innovation, pushing investment in both overseas. In theory, the bill has little chance of becoming law. White House officials said President Obama would veto any repeal bill that reached his desk. And the Senate Democratic leadership has previously stated that it is highly unlikely that they'd allow a similar bill to come up for debate and vote in their chamber.

Some, however, such as AdvaMed President and CEO Steve Ubl, see the tide changing in favor of repealing the tax.

"Today's vote is a terrific vote in the right direction," Ubl said during a telephone news conference Thursday afternoon. "We think the House vote provides terrific momentum as we turn our attention to the Senate and we remain optimistic that there is a path forward this year."

Specifically, Ubl said he sees the possibility of "year-end legislation" that could repeal the tax, which is slated to begin in January. This could happen, he said, based on growing "bipartisan" support from Democrats in key states such as Massachusetts and Minnesota, where the device industry maintains a significant presence. Sen. Amy Klobuchar of Minnesota, for example, voted for the tax as part of the health reform law. But Klobuchar, who is running for re-election, is among key Democrats who now support its repeal as long as the funding can be replaced.

One issue is how Congress would replace the $30 billion in revenue the tax is expected to generate over 10 years. As Bloomberg reports, the bill would do this by changing another part of the health reform law involving health insurance subsidies, for which people would qualify based on a prior income. As it stands, the law would require people to repay any excess subsidy to the government based on their actual income, but with limits. The House measure would take way those limits, a measure that some Democrats say hurts low and middle-income Americans.

- read Bloomberg's coverage
- here's MassDevice's take

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