No Supreme Court word yet on Obamacare subsidies,
but another part of the health care law is closer to repeal
Monday, June 22, 2015
Today's news is that there's no news from the U.S. Supreme Court on whether the tax subsidies offered to folks who used the federal insurance exchange will continue or be eliminated.
UPDATE, June 25, 2015: The Supreme Court upholds Affordable Care Act tax subsidies for insurance purchasers at both federal and state exchanges.
But just across the street on Capitol Hill, another part of the Affordable Care Act, or Obamacare as it's popularly known, is a bit closer to repeal.
The House voted on June 18 to get rid of the medical device tax.
This 2.3 percent levy has been collected since Jan. 1, 2013, on the sales price of commonly used medical devices, such as defibrillators, pacemakers, artificial joints and heart stents.
Patient gets advice from an orthopedic surgeon about knee joint replacement. Photo courtesy OrthoWilmington.
Tax on makers, not patients: The tax affects about 7,000 manufacturers nationwide, who complain that it's holding back innovation on important devices like X-ray machines and ventilators.
Manufacturers also have long argued that it would lead to job losses. But the figures provided, for example, 195,000 over five years, have been disputed.
And while it's not an individual tax, opponents also contend that it will be passed along to patients who need treatments using the taxable devices. Again, there are no numbers here as to whether this is happening.
And a lot of items that are in wide use, including eyeglasses, contact lenses and hearing aids, are exempt from the tax.
Hated from the start: The tax has been opposed by lawmakers from both parties almost from the law's get-go back in 2010.
That unusual bipartisanship was evident again in the House vote last week, where 46 Democrats joined GOP colleagues in a 280-140 vote to approve a law that included the medical device tax repeal.
That vote margin offers hope to tax opponents that if the repeal ever gets to Obama's desk and he, as expected, vetoes it, they would be able to garner the two-thirds majority needed to override it.
Questions about the Senate: To get to that possible confrontation, however, the House repeal provision must clear the Senate. No problem, right? The upper chamber is now in Republican hands, so bring on the medical device repeal vote.
Not so fast.
True, Majority Leader Mitch McConnell (R-Ky.) has put repealing the medical device tax on his legislative agenda.
A nonbinding vote to repeal the provision also was approved via a veto-proof bipartisan majority as part of the myriad 2013 budget resolution votes. That died, however, when then-Majority Leader Harry Reid (D-Nev.) stalled it.
But the tax repeal prospects now are a bit different, beyond just the switch from Democratic to Republican control.
Money, money, money: The earlier Senate vote to repeal the medical device tax was part of a revenue-neutral proposal, meaning the money lost from eliminating the levy would have been made up elsewhere.
The bill that the House passed last week, though, doesn't have such a replacement money clause. It would just add about $24 billion to the debt over a decade.
That figure is in line with an analysis released in February by the Center on Budget and Policy Priorities that found repeal of medical device excise tax would cost the U.S. Treasury $25 billion over the 2015-2014 fiscal years.
Will the costs cause deficit hawks to back off, especially since the 2016 election cycle already has begun? Or will they support the repeal on an initial vote, but back off when it comes to override, hoping that one vote against the tax will be sufficient for political purposes.
High Court could have an effect: We could find out soon, but not soon enough to preempt the focus on the U.S. Supreme Court's ruling on the Affordable Care Act premium tax credit issue.
And if the justices uphold the law, it could derail the medical device repeal effort.
Generally, Republicans have opposed any partial fixes to Obamacare, arguing instead that the full law should be repealed. A vote simply to modify the law, especially thanks to help from their Democratic brethren, could be seen as an implicit bipartisan OK of Obamacare.
That's not a position that many in the GOP want to have to explain to voters, despite the pressure -- and campaign contributions; the medical device industry has donated $19.5 million to House members since Oct. 1, 2012 -- from the tax's corporate opponents.
You also might find these items of interest:
You can follow this conversation by subscribing to the comment feed for this post.