Bipartisan legislation authored by U.S. Rep. Erik Paulsen (R-MN) to permanently repeal the Affordable Care Act’s (ACA) excise tax on medical devices passed the U.S. House on a vote of 283-132.
The Protect Medical Innovation Act of 2018, H.R. 184, now moves to the U.S. Senate for consideration.
“Minnesota’s innovators can breathe easier since we’re one step closer to ending the medical device tax for good,” Rep. Paulsen said on July 24 following the House vote, which he said “shows strong bipartisan support for lifting this burden on innovators in an industry so important to Minnesota.”
The congressman’s home state of Minnesota currently has one of the nation’s largest medical device sectors, which has been disproportionately harmed by the tax, according to a statement from his office.
More than 35,000 Minnesotans work at more than 700 companies in the medical device sector, with 80 percent of those companies having less than 50 employees, while overall, 93 percent employ fewer than 500 people, according to the statement.
“I’m more optimistic than ever we’ll be successful in giving these job creators the certainty and predictability they need to thrive,” Rep. Paulsen said.
The 2.3 percent sales tax on medical device supplies broadly applies to numerous products, including pacemakers, artificial joints, surgical gloves, and dental instruments.
U.S. Reps. Leonard Lance (R-NJ) and Carlos Curbelo (R-FL), who were among the 279 cosponsors of H.R. 184, voted with the House majority to repeal the medical device tax, which they called one of the most burdensome tax provisions in Obamacare. U.S. Rep. Ron Kind (D-WI) was the lead Democratic original cosponsor of the proposal, which Rep. Paulsen introduced on Jan. 3, 2017.
“The medical device tax makes no sense,” said Rep. Lance. “It taxes critical health care devices patients need and it punishes New Jersey-based businesses at the center of medical innovation for the world.”
Rep. Lance also pointed out that states – including his home state of New Jersey, which is home to more than 60,000 medical technology and related jobs – “should be trying to protect and preserve job-creating industries on the cusp of life-saving breakthroughs, not chasing these industries away.” H.R. 184, he said, “will protect importers and manufacturing jobs and innovation in the Garden State’s health care industry.”
In south Florida, Rep. Curbelo said the bill lifts a burdensome tax that increased healthcare costs for patients, crippled medical device innovation, and stifled small business growth nationwide. “I hope my colleagues in the Senate will give this bipartisan proposal serious consideration so it can be signed into law swiftly,” the congressman said.
Scott Whittaker, president and CEO of the Advanced Medical Technology Association (AdvaMed), called the House approval of H.R. 184 a win for American innovation, jobs and patients.
“We commend Rep. Erik Paulsen and a number of leaders from both sides of the aisle for their commitment to permanently repealing this onerous tax and for working to ensure our member companies have the long-term certainty they need to invest in R&D, hiring and other capital improvements to create the next-generation of treatments and cures,” Whittaker said.