Medical-Device-Tax Repeal Has Bipartisan Support, And It's Going Nowhere

Unsurprisingly, politics is again getting in the way of health care policy work; surprisingly, it's not for lack of Democratic and Republican agreement.

When it comes to Obamacare, one of the only things Democrats and Republicans can come anywhere close to agreeing on is that the law's medical-device tax should at least be examined.

The House last month voted to repeal the tax by a 280-140 vote that included 46 Democrats joining the GOP to oppose the tax. Two years ago in a 79-20 vote, the Senate passed a nonbinding budget resolution that would get rid of the tax. That year, Democratic Sen. Amy Klobuchar and five other Democrats cosponsored a repeal bill with Sen. Orrin Hatch, who now is chairman of the Senate Finance Committee.

"There's clearly a lot of realization that it was kind of set in a last-minute fashion, and no one really looked at what the ramifications were for small companies, for innovation, for manufacturing, and so I think there's been a lot of support," Klobuchar said in an interview.

But this is far from a kumbaya moment for the Affordable Care Act in the Senate. While there may be enough Democratic votes to pass, repeal of the medical-device tax still has a very important Democratic opponent: the president, who has threatened to veto the bill.

Democrats also have no incentive to negotiate with Republicans on health care after the Supreme Court upheld the law for the second time last month, giving Democrats the confidence to say it's here for good. And they question how the revenue generated by the tax would be replaced, which Republicans have failed to answer. The tax helps pay for the Affordable Care Act, and repealing it would increase the federal deficit by $24.4 billion over 10 years, according to the Office of Management and Budget.

Majority Leader Mitch McConnell cleared a path for the House bill last month, using a legislative maneuver that would allow it to bypass the committee and head directly to the Senate floor. It has not yet been put on the schedule.

"We actually know that we have the votes not just to pass, but to override a veto in the House. That's a big deal. That's a lot of Democrats," said Republican Sen. Pat Toomey, who is helping head the repeal effort in the Senate. "I don't mean to say that I think we can override a veto in the Senate, but I don't know that we can't. I just don't know."

A two-thirds vote in each chamber is needed to override a presidential veto. But this probably isn't going to happen.

Republicans are united in their support for the repeal of the tax, even as they continue to push for repeal of the entirety of Obamacare. Sen. John Thune, the No. 3 Republican, said he supports looking at "some of these rifle shots at parts of it that we find most harmful." And Sen. Ted Cruz, a 2016 presidential candidate who is known for his fervent hatred of the law, also supports piecemeal repeal.

"I believe we need to repeal every word of Obamacare and I am fully in support of death by a thousand cuts to turn back this failed law that is hurting millions of Americans," Cruz said in an interview.

Democrats, however, range from hesitant to very concerned about the repeal, except for a handful of supporters. Several said they're interested in seeing the Republicans' proposal before they take a concrete stance.

Minority Leader Harry Reid was among the fewer than two dozen senators who voted against the repeal in the 2013 budget amendment and has not indicated a change in position.

But the elephant in the room is that their leader has stated his opposition—unsurprisingly, as it knocks down part of his signature domestic legislation. Even if enough Democrats join the vote to pass the bill, that doesn't mean they would support a veto override that embarrasses Obama.

"We're working on our strategy," Klobuchar said on whether a veto override would be considered.

One of Democrats' key concerns is that they haven't yet seen any offsets to the tax.

"It's a big hole in the budget if you repeal the entire tax," Minority Whip Dick Durbin said. "I've said I'm in favor of changing it to help those companies that are struggling, but I want to do it in a budgetary way that doesn't jeopardize the deficit or the Affordable Care Act."

Sen. Ron Wyden, ranking member of the Finance Committee, voted for the repeal when it was put forth as a budget amendment, but said he wants to "see the pay-fors" and "have a chance to see exactly what's being proposed."

And what happens when other industries request changes to the law as well?

"If we repeal the medical-device tax, the pharmaceutical industry is gonna say, 'How about me? The hospital folks, they're gonna say, 'How about me?' The tanning-bed industries are going to say, 'How about me?' said Sen. Thomas Carper in an interview. "It's a slippery slope."

It's unclear whether the repeal will be put forth on its own or as part of a larger package. Republicans aren't lacking for options—they could put it in an Obamacare repeal that passed through reconciliation, should they choose to use the tool that way. But if they do that, they face another veto—one that definitely could not be overcome. The tax repeal could also be included as part of a spending bill.

Despite all of the barriers to it becoming law, the repeal of the medical-device tax might be Congress's best chance of taking any form of bipartisan action on the Affordable Care Act, whether it be framed as strengthening the law or getting rid of it one piece at a time.

"I hope that we're in a world now that we can have conversations about how to perfect the bill rather than repeal it," said Sen. Chris Murphy in an interview, "and this would certainly be one of the topics for conversation."