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Coalition urges Congress to repeal medical device tax

June 26, 2019

By Jennifer Garvin

Washington — The Organized Dentistry Coalition is asking lawmakers to permanently repeal the 2.3% excise tax on medical devices set to take effect at the end of 2019.

In a June 25 letter to the Senate Finance Committee's health task force, the coalition — led by the Academy of General Dentistry — said dentists are "deeply concerned about the possible adverse impact" of the tax and shared concerns that failure to repeal could lead to an increase in cost for patients. Medical devices include dental and orthodontic devices.

"Those subject to the tax would seem to have no choice but to offset these new costs by increasing the prices of the materials, supplies and equipment sold to dental practices," the coalition wrote. "In addition to the excise tax itself, manufacturers must offset the costs of administering and paying the tax, which would likely result in higher fees for our patients."

In the letter, the coalition noted that the dental device manufacturing industry has estimated that tax could increase the cost of dental care by more than $160 million annually. It also pointed out that operating costs for dental practices, particularly specialties, are significant, and the ability to sustain or grow small businesses such as dental practices could be further strained with the implementation of the medical device tax.

"Our respective organizations understand that the rationale justifying the imposition of the tax is, at least in part, that under the Affordable Care Act there will be more patients and, therefore, more revenue for the medical segment of health care," the coalition wrote. "Under this reasoning, additional revenue would in part offset the added expense of the excise tax. However, there are no elements within the Act that would result in additional revenue related to the adult dental patient segment. Consequently, the tax places an inequitable burden on the dental community and dental patients."

The letter concluded by noting that thanks to Senate leadership and the efforts of the committee, Congress has suspended the tax twice for a total of four years and that by the end of this year, legislators will have "suspended the tax for longer than it was in effect, with no measurable impact on coverage."

"We strongly encourage the task force to recommend the full repeal of the medical device excise tax and urge the Committee to move promptly to consider legislation that includes repeal. We stand ready to work with you to advance any legislative vehicle that will address the medical device tax," the letter concluded.

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