Tax on Medical Devices

02.04.15

We take issue with your argument that medical technology companies, like insurers and pharmaceutical companies, profit from expanded health insurance coverage under the Affordable Care Act.

Those predicting a “windfall” for medical technology manufacturers overlook the fact that the majority of medical technologies benefit Medicare beneficiaries, who were already covered before the health law. The expanded demand for device purchasing because of the health law’s coverage expansion is essentially nonexistent, and dramatically countered by cuts the industry’s customers face from the law.

The tax has a profound negative effect on one of America’s most dynamic sectors; that’s one reason repeal enjoys bipartisan congressional support.

A recent industry survey — the only real-world evidence measuring the tax’s effect — found that the tax was responsible for 18,500 job losses and will lead to 20,500 fewer hirings over five years. In addition, 53 percent of respondents said their company had reduced research and development because of the tax.

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