Device Tax Repeal False Alarm

Device manufacturers got a false alarm in mid-March when the U.S. Senate voted overwhelmingly to repeal the 2.3% medical device tax.

Unfortunately, the vote was meaningless, as the measure was part of a Democratic spending bill that has no chance of passing the Republican-controlled House of Representatives. The byzantine rules of order of Congress don’t allow to just simply agree on one thing. The budget resolution is not binding, so even if the Senate resolution is reconciled with a competing House version, The Hill reports the device tax would still be in effect.

Senate Finance Committee Chairman Max Baucus of Montana, whose committee controls tax policy, voted “no” on the amendment. The bill was sponsored by Democrat Amy Klobuchar of Minnesota and Republican Orrin Hatch of Utah.

But the vote wasn’t a total waste of time as lawmakers made it clear they don’t like the tax and get to go back to home to their constituents and say they voted to repeal the tax.

The Hill reported that Republicans quickly claimed the vote as a partial victory in repealing the health care law. “Today’s bipartisan vote to repeal the medical-device tax is an important step in the right direction, ” Senate Minority Leader Mitch McConnell of Kentucky said in a written statement.

Senators from both parties can’t resist offering changes to modify the U.S. health care system through amendments to the proposed budget. About 80 of the roughly 400 proposed amendments pertained to healthcare as of Friday, March 22, with about 30 modifying President Obama’s health care law and three curbing abortion rights.

Senate Majority Leader Harry Reid of Nevada said that he would seek to limit debate to between 25 and 35 of the proposals, meaning most will not see floor action

Device companies say the tax, which applies to sales rather than profits, is unfair. Supporters of the law say device companies will get new customers, but device lobbyists argue that most of the patients who need devices are older and already covered by Medicare. Hospitals, meanwhile, have countered that, because they had already agreed to give up $155 billion in the form of Medicare payment cuts over 10 years to help pay for the health law, other sectors should contribute.

It was all for nothing. Just move along. Nothing to see here.