As the Supreme Court prepares to rule on the health care law's constitutionality, the House continues to roll back provisions that hit health care consumers, companies and providers the hardest, while advancing new ideas to make health care options more flexible.
Last week, a bipartisan majority in the House approved the Health Care Cost Reduction Act of 2012 (H.R. 436). This bill strikes two harmful components of the health care law and adds a new provision to improve Flexible Spending Accounts.
First, the bill repeals an onerous 2.3 percent excise tax on sales of medical devices scheduled to take effect on January 1, 2013, per the new health care law. The tax is sweeping, applying to everything from heart stents to MRI scanners. According to the non-partisan Medicare Office of the Chief Actuary, much of the tax would be passed through to consumers in the form of higher costs, co-pays and premiums.
At stake with this tax are huge costs to employers and thousands of American jobs. Columnist George Will recently noted that Boston Scientific and Medtronic alone are planning for a combined $275 million in new taxes next year as a result. Because this is an excise tax, it will also hit start-up companies especially hard by reducing available resources for research and development and stifling innovation.
According to economists Diana and Harold Furchtgott-Roth, the medical device tax "could result in job losses in excess of 43,000 and employment compensation losses in excess of $3.5 billion." With unemployment already above eight percent for forty straight months, this tax continues to drive the American economy in the wrong direction and should be repealed.
H.R. 436 also repeals the "Medicine Cabinet Tax," a provision of the health care law that prohibited Flexible Spending Account (FSA) or Health Reimbursement Account (HRA) reimbursements for basic over-the-counter medications, such as cough syrup or ibuprofen, without a prescription from a doctor.
Repealing this tax would alleviate an unnecessary burden on families. But it would also reduce unnecessary clogging of doctors' offices with appointments and requests for prescriptions for over-the-counter medications that do not require one.
In addition to repealing the medical device tax and medicine cabinet tax, H.R. 436 allows for an employee to "cash out" up to $500 in FSA funds at the end of the year, instead of forfeiting any remaining balance to the employer. Most FSA participants are low to middle income Americans, with seventy percent earning less than $100,000. This provision will ensure that FSA funds are not wasted or forfeited at the end of year.
The Health Care Cost Reduction Act is just the latest of several House efforts to scale back the health care law and protect patients and their doctors. Whatever the Supreme Court determines in the coming weeks, we remain committed to reforms that lower costs, free up small businesses and improve consumer choice.