NCPA - National Center for Policy Analysis

Congress Can't Find $30 Billion for Medical Device Excise Tax Repeal

July 17, 2015

Congress may be on the verge of repealing Obamacare's medical device excise tax which will reduce funding for Obamacare $24 billion over ten years. A repeal would also mean it will increase the deficit $24 billion, requiring Congress to offset repeal by cutting spending by the same amount, says senior fellow John Graham of the National Center for Policy Analysis.

It should not be difficult to find this amount of spending offsets. Below are some potential candidates that are found in President Obama's budget proposals:

  • Medicare bad debt. The budget proposes $31 billion in savings over 10 years by reducing Medicare's coverage of bad debts owed hospitals and other facilities.  Currently, the federal government pays 65 percent of facilities' bad debts.
  • Medigap plans. The budget proposes to increase deductibles for new Medicare beneficiaries, instituting a home health deductible and adding a surcharge to Part B premiums for beneficiaries who buy Medigap (Medicare supplemental) plans.  In his budget, these save $8.5 billion over 10 years.
  • Medicare Part D exclusive pharmacies. The budget proposes allowing Medicare Part D drug plans to use more tools to reduce the abuse of prescription drugs by opioid addicts in Medicare Part D. This would reduce fraud, as described in an NCPA policy report.
  • Medicaid provider taxes. In his February 2012 budget, reforms to Medicaid provider taxes was proposed. If these taxes had been stopped when President Obama proposed his reforms, the savings would have been $22 billion over 10 years.
  • Site-neutral payments. Paying the same fee for a procedure, whether done in an ambulatory clinic or hospital. President Obama's budget proposes to phase this in starting in 2017, and estimates savings of $29.5 billion over 10 years as a result.

Mr. Stanley-Becker's article suggests that Congressional Republicans are refusing to find spending offsets because they want to make Obamacare officially increase the deficit.

Source: John Graham, "Unbelievable! Congress Can't Find $30 Billion For Medical Device Excise Tax Repeal," Forbes, July 13, 2015.


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