Irving
11-07-2012, 22:39
I wanted to post up an example of an actual part of the Affordable Health Care Act, that is actually hurting/going to hurt industry in the US.
Part of the Affordable Health Care Act mandates that starting January 1, 2013, manufacturers of medical devices must now pay a 2.3% excise task on the medical devices that they produce. I will post a few articles, and you have to sift through a little BS here and there, but the result should be easy enough to see.
Here the MDMA (Medical Device Manufacturers Association) talks about the tax, but they say that it will be levied against a company's revenue. I don't believe that to be true, as that would cause businesses to close up shop and/or relocate over seas, over night.
http://www.medicaldevices.org/issues/Health-Care-Reform,-Device-Tax/
What is the medical device tax?
The $20B tax was included in the Affordable Care Act that was signed into law in 2010. The amount is based on a 2.3% excise tax that will be levied on the total revenues of a company, regardless of whether a company generates a profit, starting in 2013. Many companies will owe more in taxes than they generate from their operations. The result will be devastating to innovation, patient care and job creation.
Here is a Forbes article about the issue that brings up a major discussion point. This piece has more editorial commentary than is necessary (any), but it brings up the same point I want to make.
http://www.forbes.com/sites/billflax/2012/10/09/obamacare-will-stifle-healthcare-innovation-making-it-a-real-pain/
The liberal Center on Budget and Policy Priorities claim this won’t inhibit innovation since rising expenses may spur cost saving measures. Gee, let’s create more problems to solve. Obamacare’s apologists also suggest that because insurance coverage will expand, medical device sales may surge offsetting margin compression. Yet, industry experts refute this noting Medicare already disproportionately covers their customers.
-Obama administration says that medical device manufacturers should be happy, because with forced insurance coverage, they will now have more customers.
Obviously this is flawed thinking, as many (most?) of the new people to have health care will be young and healthy, therefor not needing health services. Second, these new people are not the customers of these manufacturers, the customers are the medical facilities. Just because there are 100 new people with health care, doesn't mean that the clinic will all the sudden need more x-ray machines. Finally, this 2.3% tax will just be passed onto the clinics, which will be passed onto the patients, which will be passed onto the insurance companies, which will just raise prices. Affordable? Hardly.
Here is a Huffington Post article that is by far the most informative.
http://www.huffingtonpost.com/2012/06/04/medical-device-tax-repeal-bill_n_1567328.html
Democrats say the growing medical device industry can afford the 2.3 percent tax. They describe the tax as part of the price device manufacturers and other providers agreed to pay in exchange for the tens of millions of new customers they will get through the sweeping 2010 health care law's expansion of health insurance coverage.
That's not the view of Republicans or the medical device industry, which has lobbied Congress heavily to kill the tax before it takes hold. GOP lawmakers have named their legislation the Protect Medical Innovation Act, and insist it is not aimed at dismantling Obama's health care law.
Part of the Affordable Health Care Act mandates that starting January 1, 2013, manufacturers of medical devices must now pay a 2.3% excise task on the medical devices that they produce. I will post a few articles, and you have to sift through a little BS here and there, but the result should be easy enough to see.
Here the MDMA (Medical Device Manufacturers Association) talks about the tax, but they say that it will be levied against a company's revenue. I don't believe that to be true, as that would cause businesses to close up shop and/or relocate over seas, over night.
http://www.medicaldevices.org/issues/Health-Care-Reform,-Device-Tax/
What is the medical device tax?
The $20B tax was included in the Affordable Care Act that was signed into law in 2010. The amount is based on a 2.3% excise tax that will be levied on the total revenues of a company, regardless of whether a company generates a profit, starting in 2013. Many companies will owe more in taxes than they generate from their operations. The result will be devastating to innovation, patient care and job creation.
Here is a Forbes article about the issue that brings up a major discussion point. This piece has more editorial commentary than is necessary (any), but it brings up the same point I want to make.
http://www.forbes.com/sites/billflax/2012/10/09/obamacare-will-stifle-healthcare-innovation-making-it-a-real-pain/
The liberal Center on Budget and Policy Priorities claim this won’t inhibit innovation since rising expenses may spur cost saving measures. Gee, let’s create more problems to solve. Obamacare’s apologists also suggest that because insurance coverage will expand, medical device sales may surge offsetting margin compression. Yet, industry experts refute this noting Medicare already disproportionately covers their customers.
-Obama administration says that medical device manufacturers should be happy, because with forced insurance coverage, they will now have more customers.
Obviously this is flawed thinking, as many (most?) of the new people to have health care will be young and healthy, therefor not needing health services. Second, these new people are not the customers of these manufacturers, the customers are the medical facilities. Just because there are 100 new people with health care, doesn't mean that the clinic will all the sudden need more x-ray machines. Finally, this 2.3% tax will just be passed onto the clinics, which will be passed onto the patients, which will be passed onto the insurance companies, which will just raise prices. Affordable? Hardly.
Here is a Huffington Post article that is by far the most informative.
http://www.huffingtonpost.com/2012/06/04/medical-device-tax-repeal-bill_n_1567328.html
Democrats say the growing medical device industry can afford the 2.3 percent tax. They describe the tax as part of the price device manufacturers and other providers agreed to pay in exchange for the tens of millions of new customers they will get through the sweeping 2010 health care law's expansion of health insurance coverage.
That's not the view of Republicans or the medical device industry, which has lobbied Congress heavily to kill the tax before it takes hold. GOP lawmakers have named their legislation the Protect Medical Innovation Act, and insist it is not aimed at dismantling Obama's health care law.