I come to the floor today in support of H.R. 436, The Health Care Cost Reduction Act of 2012. This bill would repeal two of the harmful tax hikes contained in the Democrats’ health care law – the medical device tax and the restrictions on using health-related savings accounts for over-the-counter (OTC) medication. The legislation also includes a provision that will increase flexibility for health care consumers who use Flexible Spending Arrangements (FSAs). All are fully paid-for by recouping overpayments of taxpayer-funded subsidies used to purchase health care in the government-run exchanges. Notably, every one of these provisions has bipartisan support.
As a result of ObamaCare, beginning in 2013, a 2.3 percent tax will be imposed on the sale of medical devices by manufacturers or importers. This tax will increase the effective tax rate for many medical technology companies threatening higher costs, job loss and reduced investment here at home. One study predicts as many as 43,000 American jobs are at risk if this tax goes into place. A recent Washington Post piece by George Will reinforced the threat to job creation and investment noting that:
- Zimmer, based in Indiana, is laying off 450 workers and taking a $50 million charge against earnings.
- Medtronic expects an annual charge against earnings of $175 million.
- Zoll Medical Corporation CEO Rich Packer says that the tax will impact the company’s investment in research and development stating, “That means fewer jobs for engineers.”
Plain and simple, this tax is a job-killer and it must be repealed. I commend Committee member Erik Paulsen for introducing this legislation.
Another ObamaCare tax increase, the “Medicine Cabinet Tax,” imposes new restrictions on the purchase of over-the-counter medications through tax-advantaged accounts used to pay for health care-related needs. Because of the Democrats’ health care law, patients must now get a prescription from a physician if they want to use these accounts to pay for over-the-counter medications. The ban affects everyday lives. It prevents a mom from using her HSA in the middle of the night to buy cough medicine for her sick child without a prescription. It also leaves doctor’s saddled with unnecessary appointments to get a prescription so that a parent can use their FSA to buy Claritin for their son’s allergies. One study estimates that even eliminating half of these unnecessary appointments could save patients time and the health care system more than 20 million visits each year, reaping a savings of more than $5 billion. These new restrictions must be repealed, and I am happy that the provision, introduced by Committee member Lynn Jenkins, is being considered today.
The last provision is a new approach that allows consumers the freedom and flexibility to keep more of their money. Under current law, employees’ FSA balances must be spent by the end of the year, or they will forfeit any unused balance back to their employers under the “use-it-or-lose-it” rule. Such a rule encourages wasteful and needless spending at the end of the year. This legislation would allow participants to “cash out” up to $500 in FSA balances, and those funds would be treated as regular, taxable wages. Allowing Americans to keep more of their hard-earned dollars in these difficult times is a common sense goal that should be widely supported. This provision, championed by Dr. Boustany, is a commonsense one, and I urge its passage.
Finally, I would like to just take a moment to talk about the offset for this legislation, asking those who receive higher taxpayer-funded premium subsidies than they are eligible to receive to repay all of the overpayment. Let me be clear – this is a bipartisan offset. Increasing the amount of overpayments to be repaid was a proposal first put forward by Congressional Democrats in the 2010 Medicare doc fix legislation which passed the Democrat-controlled House 409 to 2. Such an offset was used again when the House passed and the President signed 1099 repeal last year, and more than 70 Democrats supported that bill. In fact, Health and Human Services Secretary Sebelius said paying back subsidy overpayments makes it “fairer” for all taxpayers.
This legislation, and the provisions included here are supported by job creators big and small, patient advocates, senior organizations and physician groups. I urge my colleagues to join me in supporting these groups by voting for the Health Care Cost Reduction Act.