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House votes to repeal medical device tax

July 25, 2018

The House voted Tuesday to repeal Obamacare’s tax on medical device sales, part of a weeklong GOP effort to reel in health costs and blunt Democrats’ sharpest critique ahead of the midterm elections.

Democrats say President Trump’s party is “sabotaging” the U.S. health system by chipping away at their 2010 law, yet the GOP poked a soft spot in their argument by targeting the 2.3-percent excise, which helps fund Obamacare’s benefits but remains unpopular.

Nearly 60 Democrats joined majority Republicans in voting, 283-132, to repeal the tax instead of allowing it to return in 2020.

Congress froze the tax multiple times, after companies said they had to curtail hiring and pay high compliance costs while it was in effect from 2013 to 2015.

“There’s strong recognition that we need to eliminate this tax on a bipartisan basis, because it’s such bad policy,” said Rep. Erik Paulsen, a Minnesota Republican facing a tough re-election bid in a district that’s home to many device makers.

The White House says Mr. Trump supports the bill. It still must go before the Senate, where some Democrats have offered plans to repeal the tax, but would prefer to backfill the revenue that’s lost.

Opponents of the levy insist they have a strong case for scrapping it, saying it stifles innovation and was put into the 2010 law as a revenue raiser, rather than as a policy goal.

“It was done as a means to pay for the astronomical price tag that accompanied the Affordable Care Act,” said Rep. Michael Burgess, Texas Republican. “This tax burden is unfair.”

The move is part of GOP efforts to calm Americans howling over rising health costs and onerous parts of Obamacare that remain intact, after Republicans failed to replace the law with something better.

Also this week, House leaders will push to further delay Obamacare’s tax on health insurers, saying it will keep premiums in check, and expand the use of tax-advantaged savings accounts that let Americans save for their medical costs.

Some of the ideas have drawn support from high-profile Democrats.

Rep. Kyrsten Sinema of Arizona, who is running for Senate, opposes the health insurance tax, or “HIT,” while Sen. Elizabeth Warren, a possible 2020 presidential contender from Massachusetts, has pushed to scrap the device tax, saying it hurts a key industry in her state.

“There are very few issues that would unite an Elizabeth Warren and a Ted Cruz,” Mr. Paulsen said, referring to the conservative Texas senator.

Still, House Democrats refused to forfeit their “sabotage” mantra Tuesday, saying the GOP package would increase deficits and paper over bigger problems in the markets, after Republicans gutted Obamacare’s mandate to hold insurance and Mr. Trump opened the door to skimpy plans that could siphon off Obamacare customers.

“What you’re trying to do is choke it to death. You’re trying to bleed it,” said Rep. Bill Pascrell, New Jersey Democrat.

Rep. Alcee Hastings, Florida Democrat, said even if the bills draw ample support in the House, they’re ultimately wasting their time.

“This ain’t going nowhere,” he said. “This is not likely to be taken up by the Senate in August, and why we’re not doing other things, I simply can’t understand.”

“Taken together,” he added, “these measures do nothing to ameliorate the Republican attempt to eviscerate the Affordable Care Act.”

Federal scorekeepers last year estimated that repealing the medical device tax would cost the government $20 billion through 2026.

Ms. Warren and Sen. Ed Markey, also of Massachusetts, filed a bill in January that would pay for repeal by ending certain tax breaks for oil companies.

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