Conservative Groups Call for Delay on Medical Device and Insurance Taxes

House Speaker Paul Ryan, left, and Senate Majority Leader Mitch McConnell (R-Ky.) speak to the media in February outside the White House after meeting with Trump. (Alex Wong/Getty Images)

Dozens of conservative groups are calling on congressional Republican leaders to make sure that the Affordable Care Act’s taxes on health insurers and medical device makers do not take effect next year.

Congressional Republicans had aimed to permanently scrap nearly all Obamacare taxes as part of their effort to repeal and replace the ACA. But now that the GOP repeal push has collapsed in the Senate, 36 conservative groups, including high-profile members like Grover Norquist’s Americans for Tax Reform and the political arm of the American Legislative Exchange Council, are focusing their efforts on blocking the taxes on health insurance and medical devices in particular.

Congress placed a moratorium on both taxes in 2015, but that is set to expire at the end of this year. Several legislative vehicles could be used to repeal or again delay the taxes, including must-pass spending legislation and the reauthorization of the Children’s Health Insurance Program.

“Ideally, both the health insurance tax and medical device tax should be repealed permanently, as should all one trillion dollars of Obamacare taxes,” the groups wrote in a letter to House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday. “However, given the recent collapse of healthcare reform legislation, lawmakers should act to delay these two taxes so they do not hit taxpayers in 2018.”

McConnell’s office did not have an immediate comment. Ryan’s office did not respond to a request for comment.

The coalition has backing from the insurance and device industries, which are ramping up their own efforts against the taxes. Health insurers are warning lawmakers about premium hikes if the health insurance sales tax goes into effect next year. The strategy is likely to resonate in Congress, where addressing high premiums is a top priority of both parties.

UnitedHealth Group, for instance, commissioned a study it released on Wednesday that projected  premiums would rise 2.6 percent in 2018 with the tax in effect. The study, which was conducted by Oliver Wyman, estimates net premiums would rise $158 for individuals on the ACA’s individual marketplaces, more than $180 for people with employer coverage, $245 for Medicare Advantage enrollees and $181 for those on Medicaid managed care plans.

The Advanced Medical Technology Association, a trade group for medical device makers, is launching a digital ad campaign urging Congress to repeal the 2.3 percent tax on their products. Device makers aren’t likely to have much trouble in getting lawmakers to at least delay the tax, which is opposed by nearly all Republicans and Democrats on Capitol Hill.