'Symbolic' device tax repeal vote passes in U.S. Senate

Right now the likelihood of repealing the dreaded 2.3% medical device industry tax isn't terribly great. But the drumbeats for its removal continue, and the U.S. Senate escalated the call this week with a symbolic vote calling for its repeal.

As Reuters reports, the Senate voted 79-20 on March 21 in a nonbinding resolution to call for the device tax's repeal. Senate Democrats are drafting a nonbinding budget resolution to which the device tax resolution will be attached. While that, too, has no real muscle behind it, the Senate is expected to pass the measure sometime on March 22.

After the vote, the industry's major trade groups issued a joint release applauding the vote. The Medical Imaging & Technology Alliance (MITA), AdvaMed and the Medical Device Manufacturers Association all took part. Among the commentary they offered: Gail Rodriguez, MITA's executive director, reflected in a statement that "momentum is clearly growing in Congress to repeal the medical device tax."

But is it? You've been hearing for months about the push to repeal the device tax, which kicked in Jan. 1 as part of the Affordable Care Act (also known as Obamacare). And nothing has really happened yet. As Reuters notes, part of the problem is that drafters of the healthcare reform law made the tax a vital tool to help fund its crucial provisions; it's designed to raise nearly $30 billion over 10 years. And no real effort has been made yet to find a way to replace that vital funding source. Majority Leader Harry Reid and other key Senate Democrats oppose tax repeal, according to the article, so major momentum has been lacking despite industry lobbying efforts.

That could be changing, however. New York Rep. Dan Maffei introduced a bill this week that would repeal the device tax, but replace the money lost by ending three oil and gas industry-focused tax incentives. Industry lobbying continues apace. And the assessment could easily be modified or repealed outright as part of a major tax reform bill, Potomac Research Group policy analyst Paul Heldman told Reuters.

But, Heldman pointed out, major tax reform is likely a long shot, at least over the next two years. And so by default, a device tax repeal will also continue to be unlikely.

- read the press release
- get the Reuters story