By Samantha Aster
Although the U.S. Chamber of Commerce has said it will abandon its feverish efforts to repeal the Affordable Care Act (ACA), it appears to be fighting to block funding for the law rather than trying to kill the program outright. With an eye toward making the ACA unworkable, The Chamber is now focusing on repealing two key funding components: the medical device tax and the annual fee on health insurance companies.
Were the Chamber to succeed in removing funding, parts of the law would cease to function properly and would eventually fail altogether. Public Citizen does not endorse the ACA, but we do support the law being fully funded in order to move toward state-level single-payer systems, which the law’s waiver process enables. States that want to establish stronger programs can do so using this mechanism, and by establishing state level single-payer systems we hope to clear a path to eventually move toward Medicare-for-all at the federal level.
The Chamber in its lobbying efforts and messaging argues the ACA imposes substantial financial burdens on employers and individuals, and frequently labels the law a “job killer.” In making these claims, the Chamber consistently relies on exaggerated and overstated data which, when given a second look, undermine the integrity of its argument.
The medical device tax: A necessary revenue stream
The ACA is funded in part by a 2.3 percent excise tax on manufacturers and importers of medical devices. The medical device industry and the Chamber argued that the tax would increase costs, “suppress innovation” and “kill jobs,” but this could not be further from the truth.
Not only can the medical device industry afford the tax – with estimated total sales of over $100 billion – but the industry has been accused of relying on anti-competitive practices that result in almost no price competition in the market. The lack of transparency in pricing and the industry’s coziness with physicians stifles innovation, since manufacturers have little incentive to create or improve devices that increase quality of care. This tax, coupled with the ACA’s focus on cutting costs, may provide incentives for manufacturers to find ways to deliver more cost-effective care.
The U.S. Chamber pointed to a recent survey to support its opposition to the tax. The survey, conducted by the Advanced Medical Technology Association, the trade group representing medical device manufacturers, claims that the tax has forced medical device manufacturers to eliminate jobs, reduce innovation and move jobs overseas.