June 15, 2015
House Republicans have launched another assault on Obamacare. This time, they have some support from their foes on the other side of the aisle.
Two bipartisan bills that would repeal parts of Obamacare are scheduled to reach the House floor this week. One would get rid of a job-killing tax on medical device manufacturers. The other would do away with a powerful and unaccountable board of 15 members charged with cutting Medicare spending.
Full repeal of Obamacare will be impossible as long as President Obama remains in the White House with a veto pen in hand. But these two bills are a start. And if enough Democrats stand in support of them, the president may be obligated to sign them into law. Doing so would blunt some of the damage Obamacare has already done to our nation’s economy and healthcare system.
The medical device tax has proven poisonous for many Democrats, particularly those in states like California, Minnesota, Massachusetts, and New York, where many existing and start-up device makers are located.
Thirty-seven House Democrats voted to repeal the tax in 2012. A year later, 34 Democratic Senators joined every Republican in a symbolic vote to kill the levy. The most recent effort to repeal the device tax attracted 41 Democratic co-sponsors in the House.
And for good reason. The medical device tax is destroying jobs and reducing investment in research — even as it fails to take in the revenue its proponents promised.
The Congressional Budget Office claimed that the tax would raise $29 billion over 10 years. But the agency’s estimate was way off. The tax has brought in 25 percent less revenue than forecast.
The adverse impact of the tax, meanwhile, has been huge. The industry cut as many as 33,000 jobs the year the tax took effect, according to a survey conducted by AdvaMed, a leading trade group of device manufacturers. Device firms decided to forego creating another 19,000 jobs.
Medtech firms are also cutting their investments in research and development. More than half of all device firms have slashed R&D spending because of the tax.
Dollars that would have gone to jobs and research are instead lining the federal government’s pockets. And the 2.3 percent levy is payable on every dollar of every sale — not just profits. So a device firm that’s actually losing money could still face a huge tax bill.
Even a staunch liberal like Sen. Elizabeth Warren (D-Mass.) understands how this tax stifles the economy. She rightly remarked that it would hurt companies with the “broadest innovative potential.”
The other bill on the House floor this week, if passed, would kill the Independent Payment Advisory Board, created by Obamacare to rein in Medicare costs.
The “independent” part of IPAB’s name is no joke. Comprised of 15 presidentially-appointed members, the Board would be almost entirely unaccountable to Congress or anyone else. If Medicare spending exceeds limits set by law, then IPAB can impose its own set of cost controls.
Obamacare forbids IPAB from raising taxes, reducing benefits, or raising the retirement age. That leaves slashing reimbursement rates for doctors, hospitals, and drug companies as its only real way to cut Medicare spending.
Once IPAB settles on its cuts, lawmakers must either offer an alternative plan that cuts the same level of spending or muster a super-majority to block the Board’s cuts from taking effect.
To make matters worse, IPAB’s decisions can’t be challenged in court.
Hundreds of patient advocacy groups and provider organizations oppose IPAB because of its potential to deny or ration seniors’ access to needed treatments and providers.
And so do many Democrats. Earlier this month, the House Ways and Means Committee approved a bill repealing IPAB by a 31 to 8 margin. The bipartisan measure has 20 Democratic co-sponsors.
Obamacare’s proponents claim that efforts to scrap the device tax or IPAB are wastes of time. After all, the president can just veto them.
But President Obama has proven willing to make changes to his signature law — particularly when his political compatriots press him to do so. Back in 2011, the House voted to repeal a tax-reporting rule that would have buried small businesses in paperwork. President Obama signed the bill.
A year later, he agreed to axe The CLASS Act — a long-term care insurance program that even the White House admitted was a colossal failure.
The president has also gone along with legislation to eliminate Obamacare’s “free choice voucher” provision, which would have required companies to provide vouchers to low-income workers who chose not to sign up with an employer-provided health plan.
The stronger the bipartisan showing, the more pressure the president will feel to heed the will of the legislature. Congress should turn up the heat this week — by voting to repeal the medical device tax and IPAB.
This article was originally published at Forbes.com.