The beginning of the end of Obamacare (hospitals will jump on next): Medical-Device Tax Repeal Gains New Life - White House Signals Levy Could Be Dropped if GOP Offers Way to Offset $30 Billion It Is Raising
From The Wall Street Journal:
Medical-device makers are finally gaining traction in their three-year effort to repeal a tax on their products that helps fund the Affordable Care Act.
In recent weeks, House Republicans had made repeal of the 2.3% tax a proxy for their bigger fight against the health-care law championed by President Barack Obama , and device makers stepped up their lobbying efforts.
The White House ruled out a tax repeal as a condition for raising the debt ceiling or reopening the government. But even though Republicans have shifted toward seeking spending and tax concessions, rather than changes to the health law, the administration signaled Wednesday it might be willing to include repeal of the device tax later in a different context.
White House officials said the administration would be willing to review the tax in a broader discussion of the ACA, provided Republicans found a credible way to replace the $30 billion in funding the tax was projected to raise over the next decade.
The Advanced Medical Technology Association, the industry trade group known as AdvaMed, saw an opportunity this year to press the issue by having industry executives, who say the tax would harm U.S. jobs and innovation, plead their case to lawmakers.
Kevin Lobo , the chief executive at Stryker Corp., a manufacturer of knee and hip implants, spoke by phone with lawmakers about the tax, said company spokeswoman Yin Becker. Stryker expects to owe nearly $100 million this year, she said.
The industry's top lobbying group and five companies with the most sales exposure to the tax are on track to spend more on lobbying this year than in each of the previous three years, according to data from the Center for Responsive Politics. In the first half of 2013, they spent a combined $9.7 million.
"We are very pleased with the broad bipartisan interest in repealing the device tax, and the level of focus and attention to this urgent issue," said J.C. Scott , chief lobbyist for AdvaMed.
The industry's push faces big obstacles, including administration concerns that ending the device tax would prompt similar demands by other health-care industries that would help pay for the health law.
Democrats such as Senate Finance Committee Chairman Max Baucus of Montana worry the insurance and hospital industries might also try to undo their financial commitments, putting at risk about $370 billion in funding for the bill over the next decade. The tax on the insurance industry is projected to raise about $100 billion, and the industry has recently mobilized a coalition and is running print and online ads to fight it.
"This whole thing is frustrating," said Chip Kahn , president of the Federation of American Hospitals, a lobby group for for-profit hospitals. "Hospitals already have suffered $95 billion in cuts. Now these device makers may get redress," Mr. Kahn said. The federation said the $95 billion is in addition to a total of $320 billion in cuts over 10 years that hospitals face under the ACA.
Mr. Baucus pushed through the medical-device tax during the writing of the health bill after the device industry refused to negotiate new fees or cost savings as other health industries did. Democrats also said the industry would benefit from a surge in revenue because of the increased number of insured under the ACA.
By taking a stiff stance against Senate Democrats and the White House, device makers solidified support among Republicans, according to device lobbyists and congressional aides. The top lobbyist for AdvaMed became a top aide to House Speaker John Boehner (R., Ohio). A number of Democrats, particularly ones with device companies in their states, began questioning the tax and many voted against it this year in a nonbinding resolution.
For many companies, the tax isn't huge, according to projections from J.P. Morgan. Boston Scientific Corp. is projected to pay about $80 million—or roughly 1.1% of the $7.38 billion in revenue that J.P. Morgan estimates that company will generate in 2014.
The White House is trying to keep Democrats in line on the issue. Last week, House Minority Leader Nancy Pelosi (D., Calif.) dismissed a proposal to repeal the tax hours after it was unveiled by a bipartisan group led by Rep. Ron Kind , a Wisconsin Democrat.
That message was reinforced when White House chief of staff Denis McDonough came to a House Democratic caucus meeting and urged lawmakers to stay united. He asked Mr. Kind to stand down on efforts to repeal the tax, maintaining it would come at the price of cuts to defense, according to administration officials.
"The White House has always been supportive of members talking to one another, and that was communicated to Mr. Kind," his office said in a statement.
Medical-device makers are finally gaining traction in their three-year effort to repeal a tax on their products that helps fund the Affordable Care Act.
In recent weeks, House Republicans had made repeal of the 2.3% tax a proxy for their bigger fight against the health-care law championed by President Barack Obama , and device makers stepped up their lobbying efforts.
The White House ruled out a tax repeal as a condition for raising the debt ceiling or reopening the government. But even though Republicans have shifted toward seeking spending and tax concessions, rather than changes to the health law, the administration signaled Wednesday it might be willing to include repeal of the device tax later in a different context.
White House officials said the administration would be willing to review the tax in a broader discussion of the ACA, provided Republicans found a credible way to replace the $30 billion in funding the tax was projected to raise over the next decade.
The Advanced Medical Technology Association, the industry trade group known as AdvaMed, saw an opportunity this year to press the issue by having industry executives, who say the tax would harm U.S. jobs and innovation, plead their case to lawmakers.
Kevin Lobo , the chief executive at Stryker Corp., a manufacturer of knee and hip implants, spoke by phone with lawmakers about the tax, said company spokeswoman Yin Becker. Stryker expects to owe nearly $100 million this year, she said.
The industry's top lobbying group and five companies with the most sales exposure to the tax are on track to spend more on lobbying this year than in each of the previous three years, according to data from the Center for Responsive Politics. In the first half of 2013, they spent a combined $9.7 million.
"We are very pleased with the broad bipartisan interest in repealing the device tax, and the level of focus and attention to this urgent issue," said J.C. Scott , chief lobbyist for AdvaMed.
The industry's push faces big obstacles, including administration concerns that ending the device tax would prompt similar demands by other health-care industries that would help pay for the health law.
Democrats such as Senate Finance Committee Chairman Max Baucus of Montana worry the insurance and hospital industries might also try to undo their financial commitments, putting at risk about $370 billion in funding for the bill over the next decade. The tax on the insurance industry is projected to raise about $100 billion, and the industry has recently mobilized a coalition and is running print and online ads to fight it.
"This whole thing is frustrating," said Chip Kahn , president of the Federation of American Hospitals, a lobby group for for-profit hospitals. "Hospitals already have suffered $95 billion in cuts. Now these device makers may get redress," Mr. Kahn said. The federation said the $95 billion is in addition to a total of $320 billion in cuts over 10 years that hospitals face under the ACA.
Mr. Baucus pushed through the medical-device tax during the writing of the health bill after the device industry refused to negotiate new fees or cost savings as other health industries did. Democrats also said the industry would benefit from a surge in revenue because of the increased number of insured under the ACA.
By taking a stiff stance against Senate Democrats and the White House, device makers solidified support among Republicans, according to device lobbyists and congressional aides. The top lobbyist for AdvaMed became a top aide to House Speaker John Boehner (R., Ohio). A number of Democrats, particularly ones with device companies in their states, began questioning the tax and many voted against it this year in a nonbinding resolution.
For many companies, the tax isn't huge, according to projections from J.P. Morgan. Boston Scientific Corp. is projected to pay about $80 million—or roughly 1.1% of the $7.38 billion in revenue that J.P. Morgan estimates that company will generate in 2014.
The White House is trying to keep Democrats in line on the issue. Last week, House Minority Leader Nancy Pelosi (D., Calif.) dismissed a proposal to repeal the tax hours after it was unveiled by a bipartisan group led by Rep. Ron Kind , a Wisconsin Democrat.
That message was reinforced when White House chief of staff Denis McDonough came to a House Democratic caucus meeting and urged lawmakers to stay united. He asked Mr. Kind to stand down on efforts to repeal the tax, maintaining it would come at the price of cuts to defense, according to administration officials.
"The White House has always been supportive of members talking to one another, and that was communicated to Mr. Kind," his office said in a statement.
posted by Sid Cottingham | 6:07 AM
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