Shapiro claims victory against rule allowing small business owners to band together for lower insurance rates
Shapiro claims victory against rule allowing small business owners to band together for lower insurance ratesread more
Today, U.S. Senators Pat Toomey (R-Pa.) and Amy Klobuchar (D-Minn.) introduced bipartisan legislation to repeal the punitive medical device tax.
Enacted as part of the Patient Protection and Affordable Care Act, the medical device tax is a 2.3 percent excise tax on one of the nation’s most innovative industries, impacting the sale of a broad swath of products from pacemakers to tongue depressors. While the tax took effect in January 2013, it has been suspended twice, with the most recent moratorium set to expire at the end of the year. Senators Toomey and Klobuchar’s bipartisan Protect Medical Innovation Act goes a step further and finally eliminates the medical device tax.
“The specter of the re-imposition of the punitive medical device tax threatens patients, American jobs, and medical innovation,” said Senator Toomey. “It’s time to end this uncertainty once and for all and finally repeal the medical device tax. I urge my colleagues to join this bipartisan effort.”
Senators Toomey and Klobuchar also joined by 18 bipartisan cosponsors, including Senators Alexander (R-Tenn.), Blumenthal (D-Conn.), Casey (D-Pa.), Crapo (R-Idaho), Duckworth (D-Ill.), Grassley (R-Iowa), Hassan (D-N.H.), Inhofe (R-Okla.), Isakson (R-Ga.), Jones (D-Ala.), McSally (R-Ariz.), Portman (R-Ohio), Rosen (D-Nev.), Shaheen (D-N.H.), Sinema (D-Ariz.), Smith (D-Minn.), Tillis (R-N.C.), and Young (R-Ind.).
Background on the medical device excise tax
• The 2.3 percent excise tax on medical devices took effect on January 1, 2013, but has been suspended since January 1, 2016.
• The tax applies to gross sales, regardless of whether company makes a profit, making it particularly damaging for small medical device companies.
• Broad application of the tax hits devices from artificial hearts to tongue depressors (other examples include pacemakers, stents, defibrillators, joint replacements, and surgical tools).
• If it takes effect, the tax is projected to raise taxes by roughly $20 billion over the decade.
• The medical device industry employs more than 519,000 nationwide.
• In Pennsylvania, this includes 18,500 employees making an average of $64,000 per year
• The majority of medical device companies are relatively small businesses: 83 percent of companies nationwide have less than $1 million in assets; 95 percent of companies have less than $10 million in assets.
Destructive economic impact of the medical device excise tax according to Toomey
• According to the Department of Commerce, 29,000 jobs were lost in the industry while tax was in effect from 2013 to 2015.
• Researchers estimate there was a $34 million reduction in industry research and development while tax was in effect.
• The American Action Forum Estimates 25,000 additional jobs would be lost by 2021 if tax were to be implemented once again.