The Massachusetts Medical Device Industry Council (MassMEDIC) scored a big win on March 19 when the commonwealth’s senior U.S. senator, Elizabeth Warren (D), added her name as co-sponsor to a device tax repeal amendment to the Senate’s Budget Resolution. The amendment, put together by Sens. Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.), was non-binding and stipulates that the tax be repealed if a budgetary offset can be found—in other words, if the money to fund the ACA can be found elsewhere. Though the resolution did not pass on March 21, the amendment did in a 79-20 vote.
MassMEDIC is an organization of medical device manufacturers, suppliers and associated non-profit groups in Massachusetts and the surrounding region. The association launched a grassroots campaign to get Warren to co-sponsor the Orrin/Hatch amendment after it became clear she was hesitant.
Although Warren campaigned on the issue of repealing the device tax, when she was elected, her enthusiasm cooled somewhat. “When she entered office, she began to talk about her concern about an offset,” MassMEDIC President Thomas Sommer told Medical Product Outsourcing. “This was unfortunate—we were very concerned about that.” MassMEDIC’s efforts paid off.
Speaking on the Senate floor on the day of the vote, Sen. Klobuchar explained how she had opposed the 2.3 percent excise tax from its inception, despite the fact that it would help fund the Affordable Care Act by raising $29 billion over the next 10 years. “It still isn’t right because it creates too much of a burden,” Klobuchar said, arguing that the tax will not generate enough new customers to offset the costs for medical device companies.
Rather than actually repealing the tax, the passage of this non-binding amendment merely demonstrates that device tax repeal could actually be achievable should it come to the table. “It doesn’t hold the Senate to anything,” said Sommer. “It simply gives folks a sense of where the senate stands on the medical device tax.”
That’s the key difference between a Senate bill and a resolution: Bills become enforceable law, whereas resolutions are statements of will or belief passed by a body to express a consensus of opinion. They are an indication of what the real outcome would be if a bill were to be voted upon. For an amendment to be considered by the U.S. House of Representatives, it must go through the rules committee. In the U.S. Senate, amendments freely can be brought up during the course of the debate—and that is the game plan for the Orrin/Hatch amendment as the Senate debates its budget priorities for the year, looking at estimates of revenue and expenses.
Medical device tax repeal consistently has received bipartisan support whenever it is voted upon (even the times it hasn’t garnered enough votes to pass), and this time is no different. Last month, Sen. Al Franken (D-Minn.) told PostBulletin.com that he and Sen. Klobuchar brought up the topic to President Obama during a ride they took with him on Air Force One. “I think that there has been some renewed understanding on the president’s part,” Franken said, hopeful that the president may in fact be able to change his mind on the issue. “Most medical devices are used by older people, and those people are already covered by Medicare. So [the president’s] idea that because you’re covering 31 million new people there will be a huge increase in the use of medical devices, therefore justifying the tax, I don’t think that argument washes.”
Before the vote, Sommer expressed confidence that if the amendment passed, there would be a “strong possibility” for repeal of the tax.
“While the amendment’s passage does not affect the current implementation of the tax, it does illustrate widespread concern over the impact that the tax is having on medical device company operations by Senators,” Sommer said. “Passage also serves as a propellant for further work in this session of Congress. MassMEDIC will continue to advocate for full repeal and will call on its members again in the months ahead to connect with their members of Congress to voice their opposition to the tax.”