Medical Manufacturers Ask President Trump to Repeal Obamacare’s Device Tax

President Donald Trump turns to talk to the gathered media during a Christmas Eve video teleconference with members of the mIlitary at his Mar-a-Lago estate in Palm Beach, Fla., Sunday, Dec. 24, 2017. (AP Photo/Carolyn Kaster)
AP/Carolyn Kaster

Medical manufacturers asked President Donald Trump to repeal Obamacare’s device tax now that the law will take effect in 2018. Estimates suggest that the tax’s repeal could create another 53,000 jobs.

Republicans managed to repeal Obamacare’s individual mandate through the historic Tax Cuts and Jobs Act, however, Obamacare’s medical device tax will take effect in the new year.

Obamacare’s 2.3 percent medical device tax will take effect on January 1 after Republicans unsuccessfully managed to repeal the excise tax. The medical device industry strongly opposed the tax, which will be levied on everything from catheters to heart stents to artificial joints.

Congress suspended the tax for 2016 and 2o17, although the tax’s repeal was not included in the Republican Tax Cuts and Jobs Act, and Senate Majority Leader Mitch McConnell (R-KY) failed to pass an Obamacare repeal bill through Congress’ upper chamber on multiple occasions. Most Obamacare bills, including the Better Care Reconciliation Act, Sen. Rand Paul’s (R-KY) clean Obamacare repeal bill, and the Graham-Cassidy Obamacare repeal bill would have repealed Obamacare’s medical device tax.

The Advanced Medical Technology Associations (AdvaMed) and the Medical Imaging & Technology Alliance warn that the tax will negatively affect the industry by $20 billion over the next ten years.

J.C. Scott, AdvaMed’s head of government affairs, said, “What we have seen from past experience is that it comes out of funding for product development, research and the jobs associated with those things. We fear we will see employment freezes or reductions and a slowdown in the pipeline for medical innovation.”

Boston Scientific, a major medical device manufacturer, said in a statement, “The reinstatement of the device tax threatens continued investment in programs like these.”

The American Action Forum (AAF) predicted America could lose more than 21,000 jobs with the return of the medical device tax. AAF added that the net impact of the tax’s repeal could create another 53,000 jobs in the country.

AdvaMed asked President Donald Trump to repeal the medical device the tax and even asked them to direct the Internal Revenue Service (IRS) to grant medical firms “administrative relief” from the medical device tax, which could include waiving the bimonthly deposit requirement or penalties from late payments.

“Retroactive action by Congress next year cannot fully undo the impact of allowing this tax to be triggered on Jan. 1,” AdvaMed argued.


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