Impact of Healthcare Reform Bill on Hearing Aid Industry
Monday, 12 July 2010 13:19 | Written by Administrator
The House of Representatives adopted a Health Reform Reconciliation Bill to amend the Senate’s overall health reform bill which the House also adopted verbatim as part of the process. During final negotiations over the weekend, the FDA Class I medical device tax exemption was dropped; however, a specific hearing aid exemption that was included in the legislation last Thursday was retained. This will exempt hearing aids from the medical device tax that will be imposed on almost all other devices not sold at “retail.” The Senate will now consider adoption of the House’s Reconciliation Bill through a simple majority vote, although the process is likely to be challenged on various legal and procedural grounds.
The successful opposition to this tax on hearing aids can be attributed to the work of HEARPAC. Special thanks goes to Rep. Carolyn McCarthy (D-NY), lead sponsor of the Hearing Aid Tax Credit legislation and the person who organized much of the opposition to a tax on hearing aids. In addition, every Representative who attended a HEARPAC event since 2007 in support of the tax credit championed a hearing aid tax exclusion, including Reps Shelley Berkley (D-NV); Dave Camp (R-MI); Ron Kind (D-WI); Allyson Schwartz (D-PA); Mike Thompson (D-CA); Dina Titus (D-NV); and Chris Van Hollen (D-MD).
As part of the final House Reconciliation bill, the medical device tax rate was lowered from 2.9% to 2.3%. This reflects the widened tax base created by the inclusion of Class I devices which was the desire of numerous Class II and III device manufacturers. Again, hearing aids are excluded from this tax.
The House Reconciliation provisions are not binding until adopted by the Senate through its reconciliation process, and we will keep you posted as this issue develops. In the meantime, the Senate bill will be enacted into law when signed by the President. That bill does contain the Class I exemption which also excludes hearing aids from the tax.