House votes to repeal device tax, health account limitations

A new excise tax on medical devices and restrictions on health savings accounts would be repealed under a bill the House approved on June 7.

The House voted 270-146 to adopt legislation eliminating provisions of the health system reform law. Starting in 2013, a 2.3% tax is scheduled to be imposed on medical device manufacturers and importers. The revenues generated will support tax credits for lower-income Americans to obtain health coverage starting in 2014.

The House also voted to allow patients again to use money from health savings accounts and flexible spending arrangements to buy over-the-counter medicine instead of requiring a physician’s prescription to use such funds. Physicians have said the requests for such prescriptions have been unnecessary administrative burdens on their practices.

“When it comes to health care choices and the rising cost of medical care, the government should not be restricting access to more affordable over-the-counter medications,” said Rep. Tom Price, MD (R, Ga.).

Sen. Orrin Hatch (R, Utah) applauded the bill’s passage. He has introduced similar legislation in the Senate and urged his colleagues to follow the House’s lead, but Senate Democratic leaders have no plans to do so.

The White House also has threatened to veto the legislation if it reaches the president’s desk in its current form. The Obama administration objected to paying for the device tax repeal and the other provisions by increasing restrictions on the reform law’s insurance tax credits.

“The medical device industry, like others, will benefit from an additional 30 million potential consumers who will gain health coverage under the Affordable Care Act starting in 2014,” the White House said in a statement. “This excise tax is one of several designed so that industries that gain from the coverage expansion will help offset the cost of that expansion.”

Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/06/18/gvbf0618.htm.