A provision of the two-year federal budget plan that Congress approved in December establishes a fund to pay for the repeal of the 2.3 percent medical device tax.
That doesn’t mean that the tax, which helps pay for the Affordable Care Act, will be abolished. A deficit-neutral reserve fund is essentially a procedural tool for letting budget writers revise allocations to pay for specific legislation. The repeal of the medical device tax would still require the approval of Congress and the president.
But the fund’s inclusion in the budget bill gave device-tax opponents a glimmer of hope.
The Medical Device Manufacturers Association “applauds the continuing bipartisan support for putting an end to the medical device tax. With each passing day, this onerous policy impedes innovation, thwarts patient care and destroys jobs,” MDMA President and Chief Executive Officer Mark Leahey said in a statement last month.
About 20,000 people work for medical device makers in Indiana, making it one of the leading states for such jobs. Roughly 13,000 of them work in Warsaw for orthopedic implant manufacturers that include Biomet, DePuy, Medtronic, Paragon Medical, Symmetry Medical and Zimmer. Zimmer has estimated that the device tax might cost the company as much as $50 million a year.
Indiana’s congressional members – including Rep. Marlin Stutzman, R-3rd, who represents Warsaw – have been among the most vocal foes of the tax.
“The medical device tax is unfair to patients and destructive to Hoosier jobs. I’ll continue to do everything in my power to end this tax and save jobs here in northeast Indiana,” Stutzman said in an email.
The budget provision is the latest effort by lawmakers from both parties to eliminate the tax. A bipartisan group of senators recommended suspending the tax for two years during talks to end the partial government shutdown in October. The Democratic Senate voted 79-20 last year in favor of a nonbinding amendment to repeal the tax. The Republican House voted 270-146 to repeal the tax in 2012 and has passed legislation more than 40 times to rescind the entire health care law.
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