Device tax battle escalates as King ruling looms
Congressional Republicans moved forward last week with their efforts to roll back the Affordable Care Act even as the nation nervously awaits a U.S. Supreme Court ruling that could make healthcare coverage unaffordable for millions of Americans and throw the individual insurance market into chaos.
The House, on a bipartisan 280-140 vote, approved bipartisan legislation last week to repeal the ACA’s 2.3% medical-device tax. President Barack Obama has said he will veto the bill because it does not identify an alter- native revenue source to offset the projected $24 billion loss of revenue over 10 years.
The vote tally, which fell one vote short of a veto-proof majority, comes as the Supreme Court is poised to issue its decision on the legality of the law’s premium subsidies in as many as 37 states. If the court strikes down the subsidies, some observers think Obama and the Democrats could offer the device-tax repeal as a sweetener in a deal to preserve the premium subsidies.
ACA supporters are nervous about repealing the device tax because it likely would boost pressure to kill other ACA taxes that fund coverage expansion, including the health insurance premium tax and the socalled Cadillac plan tax on high-value employer health plans. Repealing the device tax has bipartisan support in the Senate because many device manufacturers are located in Democratic-leaning states such as Massachusetts and Minnesota. But it’s unclear whether the legislation can win a veto-proof majority in that chamber.
A study released by the Advanced Medical Technology Association found that the device tax had resulted in the loss of 33,000 jobs since taking effect in 2013.
But an analysis by the nonpartisan Congressional Research Service released in November found that the financial impact of the tax is likely to be negligible.
Meanwhile, the House last week postponed final passage of a bill that would repeal the Independent Payment Advisory Board, a 15-member body of outside experts authorized by the Affordable Care Act to propose recommendations to control Medicare spending growth.
Critics say the board, whose members have not yet been nominated, is an unelected body with the unilateral power to impose Medicare cuts that would reduce seniors’ access to care. Supporters say it would force Congress to act responsibly if and when Medicare spending rose too fast.