Medical Device Tax Becomes Campaign Fodder

Antitax sentiment blurs party lines

In an election season in which the presidential campaign “issues” have ranged from “hot mics” to furtive emails, some campaign ads have highlighted a more-mundane topic: the tax on medical devices. Why? Because the tax taps into voters’ feelings about placing such levies on businesses as well as concerns about the viability of the controversial Patient Protection and Affordable Care Act (PPACA), according to an article posted on the Kaiser Health News website.

A provision of the PPACA, the tax was designed to target manufacturers of some of the most-expensive items on medical bills—from pacemakers to artificial joints. Revenues from the tax were meant to help finance the PPACA, so to some observers it became a proxy for the act itself. Congress voted to suspend the tax for two years—until 2018—after intense lobbying by the medical device industry, and, in states with a heavy industry presence, candidates are being asked to take a stand on whether they’ll push to have the tax repealed.

In California, for example, Democratic Representative Scott Peters, an incumbent, touts his antitax efforts to repeal or delay the device tax in a campaign mailer. Peters, it says, “led the effort to block for two years the harmful medical device excise tax that hurts industry R&D and job creation.” Studies are mixed on whether the device tax actually affects jobs.

The National Republican Congressional Committee added another twist. It supported an ad blasting Democrat Angi Craig, a former device-firm executive who is on record as a PPACA supporter, for opposing the tax and “seeking a special exemption for her industry” when she held that job. The ad doesn’t mention that most Republicans in Congress also oppose the tax.

Overall, antitax sentiment has blurred party lines, according to the Kaiser article.

Many Democrats voted with Republicans to approve a 2015 bill that included the two-year delay. They included PPACA supporters, such as Senators Elizabeth Warren of Massachusetts, Harry Reid of Nevada, Amy Klobuchar of Minnesota, and Dick Durbin of Illinois—all of whom come from states with a concentration of device manufacturers. Independent Bernie Sanders voted no. Presidential candidate Hillary Clinton, who accepted speaking fees from the medical device industry before launching her presidential bid, has hedged on whether she supports making the tax delay permanent. Still, 95 Republicans voted against the bill, including John McCain of Arizona.

The use of the tax in political advertising is, at first glance, a little odd, given that many surveys show the public generally does not understand what a medical device is, let alone what the tax in the PPACA involves, said Dr. Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health. But for candidates opposed to the PPACA or to higher taxes in general, the ads are appealing.

“Someone is offering to buy you an ad that criticizes the [PP]ACA and uses the word ‘tax,’” Blendon said.

AdvaMed, the device industry’s lobbying arm, paid a total of $279,139 in donations during this election cycle, according to the Center for Responsive Politics, which runs the website OpenSecrets. Medtronic, a big device firm, has given $502,867, while St. Jude Medical paid $357,389.

Source: Kaiser Health News; November 4, 2016.