Medical Device Makers Lose In Health Insurance Plan Reforms
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The medical device industry, which manufactures and sells items such as heart stents and artificial hips, has kept a low profile during the healthcare reform debate. However, that doesn’t mean that they won’t be affected. Their products are very important to many patients, but help drive up the cost of your health insurance plan. That’s probably why the House of Representatives’ healthcare reform proposal includes $20 million in taxes–coming from a 2.5% sales tax. AdvaMed, the industry’s lobbying group, is obviously unhappy with this and believes that the tax will be detrimental to the American economy.
What would medical device makers consider a more acceptable bill? One that:
- Exempt small companies, defined at those making less than $100 million
- Would be tied to specific products, presumably with more profitable products being taxed a higher rate
- Was at least partly deductible as an expense and,
- Doesn’t take effect until 2013.
As it turns out, the medical device industry was lucky. An initial Senate proposal doubled the fee to $40 million, so AdvaMed has expressed its gratefulness for the reprieve. Such a break was probably going to happen anyway, in exchange for moderate Democratic Senator’s Evan Bayh’s support. Bayh represents Indiana, a state that is the headquarters to many medical device companies. Will the goal of affordable health insurance still be achieved with this corporate giveaway?
(Image: stevendamron under CC 2.0)
