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An Unwise Tax on Medical Innovation


03/19/2015 11:00AMSign-up to receive press releases.

By Gail Rodriguez, Executive Director, MITA / Vice President, NEMA

In devising the Affordable Care Act, Congress and President Obama searched for tax monies to offset the program's costs. One revenue-raiser was a new 2.3 percent tax on medical devices. This doesn't sound like much in the overall Obamacare fundraising effort—the funds it will raise amount to little more than a rounding error. However, it will devastate one of the nation's most innovative industries and the millions of Americans who benefit from its products. The realization of its impact and the insignificant amount the tax will contribute to offsetting Obamacare costs make repeal a distinct possibility.

In the battle over the medical device tax, it is clear that support for repeal does not amount to any endorsement of Obamacare, given the tax is not an integral part of the law. Rather, the tax, which was supposed to raise $29 billion over the next decade, will deliver less than 3 percent of Obamacare's $1 trillion projected cost — all while decimating our nation's most innovative industry.

The term "medical device" may not immediately bring to mind the astounding array of innovations—advanced imaging technologies, pacemakers, stents, prosthetics and oxygen delivery systems, just to name a few—that fall under this broad category, but these products are integral to the diagnosis, monitoring and treatment of life-threatening diseases. Evidence shows that medical devices detect disease earlier, inform treatment plans, and improve health outcomes for thousands of individuals in need.

The device tax, a tax that even the Congressional Research Service says is "challenging to justify," since excise taxes are generally used to discourage undesirable activities such as smoking, just isn't a lynch pin to the fate of the law.

Read the full article.

Source: The Washington Times

 

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