As the Affordable Healthcare Act—or Obamacare as it is commonly called—moves along, medical device manufacturers are watching closely. That’s because the hotly debated Medical Device Tax continues to meet resistance among manufacturers and politicians alike. The tax, which began in 2013, was created to help fund the health-care law, and to do so, it takes 2.3 percent from the makers of defibrillators, pacemakers, artificial joints and heart stents.
After garnering disapproval from both sides of the aisle, the House of Representatives voted to repeal the medical device tax in June by a vote of 280-140. Those opposing the repeal state that completely eliminating the medical device tax without establishing an alternative area of funding creates a shortfall of about $25 billion.
Because the House’s decision was one vote short of a veto-proof consensus, the vote will go to the Senate next where the lack of alternative funding has stalled the repeal previously. Even if the Senate approves the repeal, President Obama holds veto power. The prospective strategy may attach the medical device tax repeal to other legislation that Obama would find hard to veto or to negotiate to limit the tax. In any case, the Senate will determine the next step in this long debate.