Senate Refuses to Exempt Veterans from Health Bill’s New Tax on Prosthetics and Other Medical Devices; Also Refuses to Exempt the Disabled and Children

By Terence P. Jeffrey | March 25, 2010 | 3:02 PM EDT

Sen. Pat Roberts (R.-Kan.) sponsored an amendment to the health-care reconciliation bill that would have repealed the new tax on medical devices included in the health care law signed by President Obama. (Congressional photo)

( - The Senate defeated three separate amendments offered to the health-care reconciliation bill on Wednesday night that would have abolished or limited the impact of a new tax on medical devices—including prosthetics, such as artificial limbs—that was enacted in the new health-care law President Barack Obama signed on Tuesday.
One of those bills would have completely repealed the new tax, another would have exempted those in veteran's health programs and members of TRICARE (the government insurance plan for military personnel, veterans and their families) from its impact, and a third would have exempted children and the disabled, including disabled veterans.
“Let me tell you, I hope my colleagues on both sides of the aisle will stand up for the wounded warriors,” said Sen. Orrin Hatch (R.-Utah), as he introduced his amendment, which exempted military personnel, veterans and their families from the the medical devices tax. “I hope they will stand up and realize that these folks should not be hammered with higher costs on medical devices. We owe them a debt of gratitude not more taxes.”
“Who are the folks who will bear the burden of this tax?” asked Sen. Pat Roberts (R.-Kan.), who sponsored the amendment that would have killed the tax entirely. “People with disabilities, diabetics, amputees, people with cancer, just to name some of the people—and more—who will see their costs go up because of this tax. We do not want to do this. Why would we want to do this on those who are most vulnerable?”
Sen. Jim Inhofe (R.-Okla.), who sponsored an amendment to exempt children and the disabled from the tax, pointed out that his proposal would not only prevent the tax from increasing the cost of prosthetic limbs for wounded troops but also that it would prevent the tax from increasing the cost of incubators for prematurely born babies.
His amendment, Inhofe said, “excludes those devices for children and those with disabilities. For example, some of our troops coming home have lost limbs and they have prosthetic devices. This is for them. This is for the 8-year-old whose heart quit beating in the middle of the night and they put a pacemaker in and it saved his life. It is for incubators and this type of thing.”
Speaking on the Senate floor in opposition to Sen. Inhofe’s amendment, Senate Finance Chairman Max Baucus (D.-Mont.)said: “It exempts a certain group from the shared responsibility in helping finance health care reform.” Baucus opposed all three amendments, as did most Senate Democrats.
Sen. Roberts’s amendment to repeal the medical-devices tax was defeated 56-42. Sen. Inhofe’s amendment to exclude children and the disabled was defeated 57-41. And Sen. Hatch’s amendment to exclude people insured by TRICARE or in veteran’s health programs was defeated 54-44.
The new medical-devices tax is expected to bring in $20 billion in revenues over the next ten years to help cover the cost of President Obama’s health-care plan. The tax will be paid to the government by the manufacturers and importers of medical devices, but the Congressional Budget Office and Joint Committee on Taxation determined that those manufacturers and importers would simply pass the cost of the tax through to the consumers of their products by raising prices.
Sen. Charles Grassley (R.-Iowa), the ranking Republican on the Finance Committee, had asked the CBO and JCT what the impact of the $20 billion tax on medical devices would be when the provision first came up in his committee. “Both of them said these excise taxes will be passed on to the consumers in the form of higher prices and higher insurance premiums,” said Grassley.