Multiple Amendments (#3644, #3588, #3706, and #3579) Striking the Device Tax
Below please find a summary from my colleague Jon Lieber regarding several amendments to strike the device tax for specific groups. Senator Hatch has an amendment (#3644) to protect wounded warriors (anyone covered under TRICARE for Life or the veteran’s health care program), Senator Inhofe has an amendment (#3588) to protect pediatrics, Senator Crapo has an amendment (#3706) to protect cancer patients, and Senators Roberts, Inhofe, and Brown have an amendment (#3579) to strike the tax altogether.
Summary
The reconciliation bill converts the annual fee on the medical device industry into a 2.3 percent tax on medical device sales.
Eyeglasses, contacts, hearing aids, and “generally purchased” goods are exempt from the tax.
However, a long list of commonly used goods such as those classified as Class I, and basic medical devices such as wheelchairs, stethoscopes, and hospital beds are not exempt.
This tax raises $20 billion over 10 years.
These amendments would exempt devices used by various groups from this tax; each amendment is paid for by lowering the affordability exemption in the individual mandate from 8 percent of income to 5 percent. The affordability exemption creates a threshold so that people who do not have access to affordable health insurance (that costs less than the threshold) do not have to pay the individual mandate penalty. In the underlying bill this threshold is 8 percent of income; this revenue raiser lowers the threshold to 5 percent of income so more people have to pay. This provision was accepted by members on both sides during the Senate Finance Committee mark-up.
Considerations
This tax will drive up the cost of nearly all medical devices, including wheelchairs, surgical masks, stethoscopes, gloves, IV, blood pressure monitors, scissors, needles, cribs, trays, lights, stents, pacemakers, scales, scalpels, inhalers, all manner of prosthesis, and ankle, knee, and hip braces.
A tax on these basic instruments of medicine will raise costs for everyone who receives health care, including wounded warriors, children, and cancer patients.
JCT and CBO have told us that these taxes will be passed along to consumers in the form of higher prices and will make medical care less affordable and less accessible.
These groups should not be made to pay for a new entitlement.