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UPDATE: Medical device tax survives Supreme Court ruling

Thu, 06/28/2012 - 10:31am
Mass Device

The U.S. Supreme Court upholds the Patient Protection & Affordable Care Act, leaving the medical device tax in place.

MassDevice.com news

The U.S. Supreme Court voted to uphold the the healthcare reform law this morning, meaning the medical device tax is likely to stand.

The Supremes' decision comes as a shock to observers who'd predicted that they would rule the Patient Protection & Affordable Care Act's mandate unconstitutional. Chief Justice John Roberts joined the high court's liberal wing in deciding that the mandate, which requires the uninsured to purchase health insurance or pay a penalty, qualifies as a tax.

The decision means that the medical device tax will go into effect Jan. 1, 2013, unless repeal efforts underway in Washington succeed.

Early readings of the decision are that the court upheld almost all of the law's provisions, except for the ACA's provisions governing the expansion of Medicaid.

The ruling has "ZERO effect on the device tax," Prof. Kevin Outterson of the Boston University Law School told MassDevice.com via email.

For medical device companies, that means they'll pay a 2.3% excise tax on U.S. sales of medical devices next year. Beltway Republicans are pushing a repeal bill, but that effort is likely D.O.A. in the Democrat-led Senate.

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