Legislation that would impose the first federal tax on vaping products is slated for a House Ways and Means Committee vote Wednesday, along with several other health care-related tax measures.
The bipartisan bill, from New York Reps. Tom Suozzi, a Democrat, and Republican Peter T. King, would tax “any nicotine which has been extracted, concentrated or synthesized” at the same rate cigarettes are currently taxed, or the equivalent of $50.33 per 1,810 milligrams of nicotine.
The Joint Committee on Taxation said the new tax would raise $9.9 billion over a decade.
Suozzi, a Ways and Means member and former Nassau County executive, said higher cigarette taxes have discouraged smoking in his home state and lowered the cancer rate. In a statement, he cited statistics from the Centers for Disease Control and Prevention showing 1,479 cases of lung illness and 33 deaths stemming from vaping and e-cigarette usage.
The measure would exempt from the new tax any products that the secretary of Health and Human Services certifies has been approved by the Food and Drug Administration for use as nicotine replacement therapy.
Suozzi said the revenue from the new tax would offset the cost of health care-related tax break proposals the Ways and Means Committee will also take up Wednesday.
The most costly of those bills, from Democratic Rep. Ron Kind of Wisconsin, would repeal a prohibition imposed by the 2010 health care law on the use of health savings accounts and flexible spending arrangements to purchase over-the-counter drugs. It would also allow reimbursements from those and similar accounts for purchasing menstrual products.
Kind’s bill, which has bipartisan support, including GOP Ways and Means members Jackie Walorski of Indiana and Darin LaHood of Illinois, would cost $8.5 billion over 10 years, according to the Joint Committee on Taxation.
Another bill the panel will consider would require high-deductible health plans — or plans with an annual deductible of at least $1,350 for individuals and $2,700 for families — to cover inhalers for treatment of chronic lung diseases like asthma before hitting the deductible. The JCT said the bill, sponsored by Democratic Reps. TJ Cox of California and Terri A. Sewell of Alabama, would cost $1.4 billion over a decade.
Finally, the committee on Wednesday plans to consider legislation by Democratic Rep. Earl Blumenauer of Oregon that would allow individuals with memberships in direct primary care service arrangements to contribute to health savings accounts, as long as monthly fees don’t exceed $150.
Direct primary care services have grown in popularity as typically low-cost options for patients without insurance, but since the IRS classifies such arrangements as a form of insurance, participants are unable to contribute to or pay for services out of HSAs.
Blumenauer’s bill, co-sponsored by two Ways and Means Republicans, Devin Nunes of California and Jason Smith of Missouri, would remove the current prohibition only for services provided by primary care practitioners. Procedures requiring anesthesia, prescription drugs other than vaccines, and laboratory services wouldn’t qualify. The JCT said the measure would cost about $1.8 billion over 10 years.
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