Medical device companies get tax cut under Obamacare repeal bill

The new Republican health plan to replace Obamacare was unveiled earlier this week drawing criticism from a number of parties for shutting down private health insurance coverage for abortion and potentially increasing prices for essential health benefits.

One major provision of the bill includes a permanent repeal of the 2.3% medical device tax.

The medical device tax has been suspended since 2015, and has been opposed by medical device companies, small business and the domestic industry for negatively impacting job creation. The suspension occurred following a push by AdvaMed, which represents medical device companies.

The American Health Care Act (AHCA), as the new bill is known, aims to repeal the tax starting 1 January 2018.

Speaking to Focus, AdvaMed president and CEO Scott Whitaker said: “AdvaMed commends the House Ways and Means Committee for moving forward with legislation that will permanently repeal the medical device excise tax. Bipartisan majorities in both the House and Senate are on record in support of repeal of this onerous tax, which has been associated with significant loss of American jobs.

"Repealing the tax will provide medical technology innovators with the long-term certainty necessary to support future job growth and sustainable, cutting-edge R&D that will ultimately lead to the next generation of breakthroughs in patient care and treatment," he added. "We urge the House and Senate to act expeditiously to pass this important legislation."

Tom Price, the secretary of Health and Human Services said the new bill “will provide all Americans with access to affordable, quality healthcare, promote innovation, and offer peace of mind for those with pre-existing conditions.”

However, the repealing of the medical device tax has been labelled as another boon for the rich, being cited as a tax cut.

Los Angeles Times reported that repealing the medical device tax would amount to a tax cut of $346 billion over 10 years, with the savings going to the wealthy, or those earning over $200,000.

Former head of the Centers of Medicare and Medicaid Services Andy Slavitt also criticised the bill stating it is” basically a tax cut ($600 billion) funded by gutting Medicaid."