House committee OKs bill to repeal medical device tax

A measure to repeal a health care reform law provision that imposes a 2.3% federal excise tax on manufacturers of medical devices was earlier introduced by Rep. Erik Paulsen, R-Minn./ AP

Legislation approved Tuesday by the House Ways and Means Committee would repeal a health care reform law provision that imposes a 2.3% federal excise tax on manufacturers of medical devices.

Revenue generated by the tax, which first went into effect two years ago, is used to help offset the cost of federal premium subsides provided to the lower-income uninsured who purchase coverage in public health care exchanges.

The measure, H.R. 160, introduced by Rep. Erik Paulsen, R-Minn., and approved by the Ways and Means Committee on a 25-14 vote, would repeal the tax, which went into effect Jan. 1, 2013.

“There are the laws that make no sense at all. Today, we tax medical devices — things like heart valves and pacemakers — the very things that save lives. It's an iron law of economics that when you tax something, you get less of it. So we've really got our wires crossed here,” Ways and Means Committee Chairman Paul Ryan, R-Wis., said in a statement prior to the panel's vote.

The bill, which has a whopping 281 co-sponsors, is expected to be considered by the full House of Representatives later this month.

If the measure is approved, it will be the second time this year that House lawmakers have passed legislation to repeal part of the Patient Protection and Affordable Care Act.

Earlier this year, the House approved a measure bumping up the health care law's definition of full-time employees to those working an average of 40 hours per work. The ACA now defines a full-time employee as one working an average of 30 hours per week.

That definition is a key one for employers as the law imposes a $2,000-per-employee penalty on employers that don't offer coverage to at least 70% of their full-time employees this year, while in 2016 and succeeding years, the penalty will be triggered if an employer does not offer coverage to at least 95% of its full-time employees.

The Senate has not acted on either measure.