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house Bill H.R. 184

Should the Obamacare Tax on Medical Devices be Repealed?

Argument in favor

Even though the medical device tax is supposed to apply to manufacturers and importers, the costs just get passed on to consumers. Passing those costs off on patients makes healthcare more expensive.

LulyPop's Opinion
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01/15/2017
i don't really feel bad for the government missing out on yet another tax source. for those of you that want a "full investigation" on obamacare, do it yourself. remember: just because it's working for you doesn't mean it's right for everyone. taxation in healthcare is NOT liberty.
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01/11/2017
I support any reduction in taxes for anyone at any time for any reason. There's a 2.3% tax? Let's make everyone 2.3% more free and abolish it.
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operaman's Opinion
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01/12/2017
One tax down, many to go. One step is not a journey, but a step towards the proper destination.
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Argument opposed

The medical device tax barely has an effect on consumer prices. Plus, this bill offers no way to make up for the lost tax revenue that the government would miss out on if the tax is repealed.

MP's Opinion
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01/15/2017
Healthcare is a complex system because we refuse to have universal healthcare like every other major nation. So yes we need every tool at our disposal to help make it work. Keep the tax.
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Leslie 's Opinion
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01/15/2017
As a pharmacist I feel that it's not a hardship. I know how much their profit margins are on this stuff. Please keep the needed funding in place.
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01/11/2017
I'm opposed to any changes to the ACA without a full look into its entirety. Why change one small piece at a time? Let's look at the all the adjustments that may need to be made and do it all at once.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house Passed July 24th, 2018
    Roll Call Vote 283 Yea / 132 Nay
      house Committees
      Committee on Ways and Means
    IntroducedJanuary 3rd, 2017

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What is House Bill H.R. 184?

This bill would repeal the 2.3 percent tax on medical device manufacturers and importers, that was imposed as a way to fund the Patient Protection and Affordable Care Act (ACA).

The medical device tax applies to things like pacemakers, or artificial joints used in operations like hip replacements. Given that a pacemaker usually costs around $23,000 the cost of the tax in that case would be about $529.

During the previous Congress, a two-year suspension of the tax was signed into law by President Obama after passing Congress with bipartisan support.

Impact

People purchasing medical devices, medical device manufacturers and suppliers, the federal government.

Cost of House Bill H.R. 184

A CBO cost estimate is unavailable, but during the 114th Congress it estimated that a repeal would reduce tax revenue by $24.4 billion.

More Information

In-Depth: An analysis by the Congressional Research Service found that based on the way the medical device industry works, the ACA's medical device tax does not end up cutting into medical device company products, but is rather “passed on to consumers in price.”

However, the Center for Budget and Policy Priorities disagrees, pointing out that spending on taxable medical devices represents less than 1 percent of total personal health spending, so a small price increase would “have an almost imperceptible effect on health care costs and health insurance premiums.”

During the 114th Congress, this bill was passed by the House Ways and Means Committee by a vote of 25 to 14, and had support from 281 cosponsors — which included 40 Democrats. Speaking about his legislation after reintroducing it during the current session of Congress (this time with 277 bipartisan cosponsors so far -- 233 Republicans & 44 Democrats) sponsoring Rep. Erik Paulsen (R-MN) said

“One of the best ways to protect American manufacturing, spur innovation, and make sure the latest and best medical technology is affordable for patients is to repeal this burdensome tax. We are already seeing new American jobs and increased investment in research and development as a result of the temporary suspension of this tax.”

Some Democrats in the House of Representatives have criticized this proposal for failing to replace the lost tax revenue that the federal government would miss out on if the medical device tax were to be repealed. Rep. Xavier Becerra (D-CA) said: 

“Money doesn’t grow on trees. Just about every member would say, ‘Lets go forward and undo the tax,’ if, as some of the members on this side have said, we come up with a pay-for.”

Media:

Summary by Eric Revell
(Photo Credit: Magnus1313 / Creative Commons)

AKA

Protect Medical Innovation Act of 2018

Official Title

To amend the Internal Revenue Code of 1986 to repeal the excise tax on medical devices.

    i don't really feel bad for the government missing out on yet another tax source. for those of you that want a "full investigation" on obamacare, do it yourself. remember: just because it's working for you doesn't mean it's right for everyone. taxation in healthcare is NOT liberty.
    Like (100)
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    Healthcare is a complex system because we refuse to have universal healthcare like every other major nation. So yes we need every tool at our disposal to help make it work. Keep the tax.
    Like (459)
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    As a pharmacist I feel that it's not a hardship. I know how much their profit margins are on this stuff. Please keep the needed funding in place.
    Like (300)
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    I'm opposed to any changes to the ACA without a full look into its entirety. Why change one small piece at a time? Let's look at the all the adjustments that may need to be made and do it all at once.
    Like (296)
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    Let's not be hasty changing ACA. I know too many people whose lives have been saved since its enactment. I don't love everything about it. I don't like how much I have to pay for healthcare on my own. But this is one of those "greater good" things. Don't toss any of it unless and until you have a better replacement worked out.
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    I want this president repealed. This man's puppeteer is orchestrating a take over and transforming our democracy into a new age fascism for or the old fascist reasons. Let's organize and get the job done. First Trump then the republicans who have put party before country.
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    Please do not repeal the ACA!!! This constituent of your strongly supports it!
    Like (68)
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    I support any reduction in taxes for anyone at any time for any reason. There's a 2.3% tax? Let's make everyone 2.3% more free and abolish it.
    Like (60)
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    One tax down, many to go. One step is not a journey, but a step towards the proper destination.
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    Please note that this tax has already been suspended and signed by Obama, this just makes it permanent. Why? Because the tax is applied to medical devices, i.e., pacemakers, hip replacements, for example. Think about it, most of this tax is for people in the Medicare demographic, it cuts into the MEDICARE budget, the cost does not come from the manufactures or the importers, it is billed to the patient via mostly Medicare, so it needs to be changed more than repealed, there should be a tax on corporations making theses devices. A pacemaker costs $23,000. REALLY! This doesn't include the cost of hospitalization, surgery, recovery, drugs, --no, this $23,000 is the cost of a small unit about the size of a MP3 player and 2 or 3 wires (leads) attached to insert into the heart. The technology is not a lot more complicated than a smart phone, maybe less than an tablet, but private citizens can purchase these high end computers/tablets for less than $1,000. So why do patients and Medicare have to pay $23,000 for the unit and then pay $500 tax on the unit too? It was intended to be a tax on the company(s) producing the units and making huge profits. The outcome wasn't what was intended so the tax was suspended. These companies/corporations used this tax to bill more for the device. Some of the affordable care act (Obamacare) had unintended results and the congress is trying to address those unintended consequences. This isn't a repeal of the ACA, it is a repeal of one tax in the bill that didn't work as intended. Not only is it paid out of Medicare's coffers, it has to come from the payment approved by Medicare to the hospital, this tax has to be paid before the hospital, doctors, nurses, supplies, ANYTHING. That means that the end result is less money for hospitals that are Medicare providers. (Medicare contracts are signed that state these hospitals can only charge according to a fee schedule provided by Medicare.) An unexpected outcome of this tax is less real income to hospitals and physicians that agree to charge only what Medicare fixes the price at. This means it is possible fewer hospitals/physicians may agree to this contract because the cost of running a hospital or practice is increased by a tax that was intended for a corporation already making a significant markup. With the ACA, many hospitals have been able to depend more heavily primary care providers to provide health care to people with lower incomes because many now have health insurance or Medicaid for the first time and actually have the ability to go to a primary care provider for acute illnesses rather than using emergency rooms for primary care. What many people do not understand is that repealing the ACA(Obamacare), will be a step back, ER's will be flooded again by the uninsured, underinsured, lower income population that have no other option when a family member has a sore throat, or high temperature, or stomach flu... Get it? The ACA has reduced the cost of running hospitals and clinics and increased the use of primary care providers who might actually have the patients medical history on file, so outcomes are also improved. If a patient goes to the ER for primary care, and if they can't pay, they still must be treated, so the hospital ER could operate at a financial loss, people with true emergencies face crowded ER's and longer waits, possibly leading to more serious or longer recoveries or even death. So, digressing some, but obviously this is a complicated and complex system that doesn't work very well. Small or rural hospitals will be hit hard if we don't take the time to think through unintended consequences. A tax on medical devices should be a tax directly on the producer or importer, with an emphasis on importers to encourage business for American companies producing these devices, and they should not be allowed to increase the cost of the device, the tax should be separate from the "cost of production". This can be done, these companies should be paying taxes on profits, not individual devices, with fewer corporate loopholes for tax deductions. If you make $50,000/year in America, you will pay taxes in the form of payroll with holdings for Social Security, Medicare, Federal and State income taxes and you will not have a lot of deductions to offset these deductions. At best, you might itemize and get back some of your federal income taxes, but you are still going to be paying taxes if you are employed. A corporation making a device with a cost of $1000 and selling it for $23,000, has a plethora of options and tax deductions to avoid paying taxes. We know that people making as much as $500 million have been able to avoid paying taxes at all using corporate loopholes, in comparison to the hard working person paying possibly 27.5% in with holding taxes a year. So, OK, go ahead, repeal the tax on medical devices that ends up hurting small hospitals, people paying cash for services, etc, and please find a way to have the production companies to pay a fair tax on their profits, and encourage those companies to make those devices here in America instead of China or somewhere else to avoid corporate taxes. This will protect our hospitals, physicians, Medicare, reduce the cost of healthcare, and create jobs at home. So, while it seems complex, it is really quite simple. I am for repealing the tax on medical devices, one small part of ACA that doesn't work, and creating taxes on companies making medical devices as well as taxing additionally on medical devices that are imported.
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    Why not amend the ACA instead of repeal it? If your home renovation does not turn out quite right do you burn down your house and start over??? No you make adjustments until it is just right!! Government needs to get smarter and less petty.
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    This program just needs to be fine tuned, not repealed
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    Don't repeal the ACA, repair it.
    Like (29)
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    The entire Obamacare Law must be repealed and a free market system must be allowed. Healthcare is a service and you cannot compel someone to provide a service to anyone! You make a service free then there is no incentive for the service providers to improve the service or to even continue providing the service. Therefore eventually it will be free but nonexistent or ineffective! The federal government has no business in personal healthcare insurance other than regulating as interstate commerce. The insurance company lobby since the 1950's has lobbied state legislatures and the federal government for laws/rules that eliminate competition so that they can dictate to us the people what we can and cannot do. There are only a few things that need to be done to fix this some of which as follows: 1 all insurance companies should be able to provide insurance anywhere in the country. They can for life insurance why not health insurance. 2 the tax code needs to be changed to eliminate all employer tax incentives for healthcare benefits to their employees including all state, local, and federal employers. All health insurance must be by individuals or families no groups. 3 all necessary and preventive health costs including insurance premiums, co-pays, deductibles, dentist, eye glasses etc. should be fully tax deductible up to the gross income of the individual paying for it. If you are paying for your children’s plans then that comes off your income as a full deduction 4 tort reform regarding malpractice. This needs to be controlled and limited so the doctors can do their job and the patients are not charged for unnecessary tests.
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    Rand Paul is rolling out his plan this week. Anything at this point is better than ACA
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    Yet another vote to dismantle the most meaningful healthcare reform in over 50 years. I understand that Republicans have issues with Obamacare. There are lots of improvements needed. But rather than be leaders, examples to the world, and improve the system for all of us, they are doing what they've always done: provide unnecessary tax breaks to the wealthy, and make life more difficult for working families and the poor. My "representative," Lamar Smith, ignores the needs of his constituents by voting time and again to repeal legislation that the majority of us want, and voting for laws that will actively hurt millions of Americans. He has no conscience.
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    Every part of Obamacare should be repealed.
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    YES YES YES. EVERY SINGLE WORLD OF THE UNCONSTITUTIONAL PILE OF SOCIALIST GARBAGE SHOULD BE REPEALED. And it should be carefully replaced with market based reforms that improve competition and give more power to the patient.
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    I am in favor of single payer universal healthcare but the ACA is preferable to what preceded it. I also don't think that a balanced budget is a critical issue at this point in time for a country that can print it's own currency and whose debt is a small fraction of GDP so I don't see the need for this tax. It is immoral to tax healthcare and healthcare products. What should be taxed are the things that cause deteriorations in health like fast food, soft drinks, tobacco products, environmental polluters, carbon/methane emitters, and war profiteers.
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    Of course. It was a stupid move to add costs to already expensive devices anyway. No amount of excess taxation was going to save this terrible, poorly designed program. Repeal and replace.
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