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On Thursday, at least three dozen Democrats joined the Republicans in the House of Representatives to kill Obama’s 2.3 percent tax on medical devices, and several other parts of Obamacare. Though the move may find stiff resistance in the Democrat-led Senate, it’s certainly food for thought. The House repealed the provisions in a 270-146 majority.
However, the Obama administration has declared that it is going to veto the move, saying that the medical device industry would benefit from the added tax and from Obamacare as a whole.
Leading Democrats opined that the manufacturers are aware that Obamacare would benefit them and that is why they did not oppose the tax in 2010. However, now that the future of Obamacare is uncertain in the hands of the judicial activists of the U.S. Supreme Court, the industry has moved to make sure that the tax is killed beforehand.
Democrat Representative Jim McDermott said, “This is a PR stunt for the election. The Repulicans are helping the device industry back out of a deal they made.”
Republicans, on the other hand, placed the medical industry-funded studies that showed the new medical device tax would lead to loss of jobs and that the device makers had been lobbying for repealing the tax.
Republican Dave Camp said, “This tax will increase the effective tax rate for many medical technology companies, threatening higher costs, job loss and reduced investment here at home.”
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The bill is certain to be blocked in the Senate, and even if it manages to pass the administration has already threatened to veto it.
Ipsita Smolinski, who works in Capitol Street and watches investors, said that healthcare investors are following the movements of the bill with keen interest, “Not because they think the bill can pass the Senate, but because they are keeping a running list of provisions that could be repealed if the healthcare reform law is slowly dismantled post-election.”
The new House bill also repealed the part of Obamacare that aims to prevent consumers buying over-the-counter products with funds from special health savings accounts.
