A 2.3 percent excise tax on medical device manufacturers was originally imposed in 2013 as one of several taxes and fees in the Affordable Care Act that pay for expanded health insurance under the law.
Congress suspended the tax for 2016 and 2017 with the expectation it would be permanently abolished before 2018. In 2017, various GOP efforts to repeal the Affordable Care Act and the taxes associated with it failed. And, the sweeping federal tax overhaul recently signed by President Donald Trump also failed to eliminate the tax.
The tax was strongly opposed by the $150 billion a year industry that produces everything from catheters to heart stents to artificial joints.
Industry groups including the Advanced Medical Technology Association (AdvaMed) and the Medical Imaging & Technology Alliance warn the tax will take $20 billion out of the industry over the next decade.
J.C. Scott, AdvaMed’s head of government affairs is quoted in The Washington Post:
What we have seen from past experience is that it comes out of funding for product development, research and the jobs associated with those things. We fear we will see employment freezes or reductions and a slowdown in the pipeline for medical innovation.
Read about arguments from supporters and opponents of the tax in The Washington Post.