GOP: Repeal Obamacare, Then Fix the $28B Medical Device Tax
Policy + Politics

GOP: Repeal Obamacare, Then Fix the $28B Medical Device Tax

When Republicans take control of the Senate in January, they will once again vote to repeal Obamacare, which they know will be vetoed by President Obama. The GOP Plan “B” will be to chip away at the health care law, starting with the 2.3 percent tax on medical devices.

Senate Majority Leader Mitch McConnell on Wednesday said the tax was a primary target of repeal. “The medical device tax, which has exported enormous numbers of jobs, [as well as] the loss of the 40-hour workweek - big, big mistakes.”

Related: Would a GOP Congress Embrace or Replace Obamacare? 

The medical device tax is one of a handful of new taxes imposed under the Affordable Care Act to help pay for the law. The Joint Committee on Taxation has estimated that it will raise about $28 billion over 10 years. Opponents say it is extremely harmful to businesses and could result in substantial job losses. 

The effort to do away with the tax has a fair amount of support from both Republicans and Democrats, especially in states like Minnesota and Indiana, which are home to major medical device manufacturers. The industry has aggressively lobbied Congress to do away with the tax, which they say has driven up the price of devices and led to job cuts. 

However, a new report from the Congressional Research Service said economic impact of the medical device tax on manufacturers would be “relatively small.” 

“The analysis suggests that most of the tax will fall on consumer prices, and not on profits of medical device companies,” the report stated. “The effect on the price of health care, however, will most likely be negligible because of the small size of the tax and small share of health care spending attributable to medical devices.” 

Related: GOP Strategy on Obamacare: Repair or Repeal? 

Still, its repeal has garnered support from at least 79 senators, who symbolically voted to scrap the levy last year. Democratic Senate Majority Leader Harry Reid did not allow an actual binding vote on the legislation – but now, with McConnell at the helm, that will change. 

Though the White House has previously supported keeping the tax intact, it’s unclear what action President Obama would take if Congress approved its repeal. During a press briefing on Wednesday, President Obama did not rule out the possibility of signing a repeal of the tax into law. 

If the tax is repealed, lawmakers will have to figure out where to recoup the nearly $30 billion the tax is estimated to bring in to help pay for the law. 

Meanwhile, Republicans are also gearing up to take aim at a handful of other Obamacare provisions, including changing the law’s 30-hour workweek to a 40-hour-a-week threshold and potentially zeroing in on the employer mandate. 

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