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(Medical) Device tax may change as 'fiscal cliff' approaches
Plastics Today ^ | 11/8/2012 | Doug Smock

Posted on 11/09/2012 7:54:21 AM PST by Rio

The excise tax on medical devices, a controversial part of President Barack Obama's Affordable Care Act, is now evolving from a medical reform issue to a tax reform issue. In a press conference in Boston last month, AdvaMed CEO Stephen J. Ubl said the group will seek to dramatically change the tax as part of the tax reform negotiations taking place to avert the "fiscal cliff" scheduled to occur when the Budget Control Act of 2011 goes into effect.

Even if the tax cannot be totally undone, it's hoped within the industry that some of its most onerous provisions could be changed. One goal, for example, is to exempt start-ups from the tax for a certain period of time.

That said, some of the staunchest opponents of the tax remain hopeful that it will be repealed, citing support from Democrats in the House and the Senate. Even liberal U.S. Senator-elect Elizabeth Warren (D-MA), mindful of medical device employment in Massachusetts, is opposed to the tax. Senior Massachusetts Sen. John Kerry has also expressed concern about the tax. Even if the Senate can muster enough votes to support a House-initiated repeal, it's doubtful that Congress could overcome a presidential veto.

Significant change of the tax as part of a major tax overhaul seems very possible, however. The major obstacle will be getting on the radar screen given the enormity of the tax reform issues under consideration. Overall tax reform provides the opportunity to find other revenue sources for Obamacare that won't affect future medical device development in the United States.

Widespread cutbacks have already begun at some major medical device makers. Some are citing the new excise tax as the cause. Others are citing slowing demand coupled with growing pressures to reduce costs of medical devices. It will be interesting to see if jobs are reinstated if the device tax is fundamentally revised.


TOPICS: Editorial; Government; News/Current Events
KEYWORDS: fiscalcliff; obamacare
This is apparently a tax hidden in Obamacare. Who is trying to change it?
1 posted on 11/09/2012 7:54:28 AM PST by Rio
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To: Rio

Not hidden.

We’ve known about it for months, and there are many more like it.


2 posted on 11/09/2012 7:58:27 AM PST by Jedidah
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To: Rio

It’s not been hidden.


3 posted on 11/09/2012 7:58:59 AM PST by MarkeyD (Obama is a victim of Affirmative Action)
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To: Rio

Maybe the damn liberals should have read the damn bill before voting to enact it. For $*%$* sake!


4 posted on 11/09/2012 7:59:04 AM PST by GnL
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To: Rio

Republicans should not support fixing it. They bought it, they own it. Or if they must, amend the law as well to supprt religious exemptions.


5 posted on 11/09/2012 8:01:46 AM PST by Vince Ferrer
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To: Rio

Congress should not be trying to repeal it. The beneficiaries of a repeal are primarily in the blue states. Why are Kerry and Warren opposed to the tax? Probably because it affects people who vote for them and fund their campaigns. It is time they felt the effects of legislation from the politicians they finance and vote for.


6 posted on 11/09/2012 8:02:17 AM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: Rio

How is Congress going to pay for reducing or repealing this tax?


7 posted on 11/09/2012 8:03:51 AM PST by Cboldt
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To: Vince Ferrer

bump

but Beohner will cave on everything


8 posted on 11/09/2012 8:04:28 AM PST by GeronL (http://asspos.blogspot.com)
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To: Rio
no changes! The dems own it; the only change that should be on the table is a complete repeal.
9 posted on 11/09/2012 8:06:55 AM PST by martinidon
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To: Vince Ferrer

"Republicans should not support fixing it. They bought it, they own it. Or if they must, amend the law as well to supprt religious exemptions."

The Republicans have a good deal of leverage here for negotiating what they want in return for this. But of course, they will never realize this.

10 posted on 11/09/2012 8:08:18 AM PST by Qbert ("The best defense against usurpatory government is an assertive citizenry" - William F. Buckley, Jr.)
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To: Vince Ferrer

Republicans should not support fixing it. They bought it, they own it. Or if they must, amend the law as well to supprt religious exemptions.


Exactly. This would be a disaster if the GOP agrees to take some bad stuff out of o-care in exchange for K Street money. I got a bad feeling the Stupid Party would do this.


11 posted on 11/09/2012 8:13:39 AM PST by lodi90 (Born free, won't die in chains)
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To: Rio
One goal, for example, is to exempt start-ups from the tax for a certain period of time.

Yeah, don't pull down the cliff, just move it. That's gotta work!

12 posted on 11/09/2012 8:17:06 AM PST by Fresh Wind
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To: Rio

The company for whom I work has been sending out petitions and has been part of a large lobbying group to try to get this repealed. going to cost my company over $40 million a year. “just pass it along to the consumers” we’ve been told.
Layoffs are on the horizon.


13 posted on 11/09/2012 8:17:17 AM PST by SparkyBass
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To: Rio

Too late. Companies have already laid off workers due to this upcoming tax.


14 posted on 11/09/2012 8:26:56 AM PST by Abigail Adams
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To: Rio
This is apparently a tax hidden in Obamacare

Yes, one of very many. There's a new 4% sales tax on real estate sales, too.

0bama is no defender of the middle class, as he claims. He's trying to tax it into poverty, so we can all be "equal."

15 posted on 11/09/2012 8:41:03 AM PST by betty boop (We are led to believe a lie when we see with, and not through the eye. — William Blake)
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To: Rio
Senior Massachusetts Sen. John Kerry has also expressed concern about the tax.

Didn't Kerry vote for the tax? I guess he was for it before he was against it.

16 posted on 11/09/2012 8:42:23 AM PST by eggman (End the Obama occupation of the White House!)
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To: SparkyBass

I would imagine the tax would affect the consumer, and ultimately the insurance company because the tax would be passed along to the consumer, and/or then to insurance.

Can you explain about the layoffs, or a cutback in production? If the doctor says you need a pacemaker, and this year the pacemaker costs more than last year (because of this hidden tax.) Is the patient going to say, well since it’s going to cost me more out of pocket, I won’t get it. Or if the insurance company denies to cover the cost and the patient dies...instant lawsuit.

Or is it because some devices are considered optional?

I have an implanted medical device... a baclofen pump (made by Medtronics.) It the only reason I can still walk, so I’d beg, borrow, or steal (well probably not steal) in order to get the device.

But it would be one of the more “optional” choices in devices because I could resort to a wheelchair and lots of anti-spasticity meds and pain pills. Which in turn means I’d be so drugged up I probably wouldn’t be able to work, which means I’d go on disability and get SS disability, which means the gov’t would be paying me instead of me contributing to the tax revenue they get from my salary...oh what a tangled web, etc.

So I guess I can see where some devices might be considered optional. Is that why there’d be layoffs?


17 posted on 11/09/2012 8:47:48 AM PST by memyselfandi59
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To: Abigail Adams

Too late. Companies have already laid off workers due to this upcoming tax.


Layoffs and full time jobs becoming part time. The joys of the Age of Obama. Btw, these are Obama donor CEOs doing much of this slash and burn but we will never hear that from the GOP.


18 posted on 11/09/2012 8:48:34 AM PST by lodi90 (Born free, won't die in chains)
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To: memyselfandi59

I’m glad to hear your baclofen pump helps your condition as much as you say. Through my work I am also very involved with this product.

The idiocy of this tax has no limits. The tax is passed on to the consumer. The patients insurer pays the tax. It’s a way the government can get paid by private insurers. The coming deal will probably be that the tax will be forgiven if the patient has government insurance.


19 posted on 11/09/2012 9:06:42 AM PST by toast
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To: Cboldt
The idea that Obamacare was ever going to be revenue neutral or actually save money is ludicrous. Medicare costs nine times more than it was originally projected to. Obamacare is another entitlement program that will hasten the bankruptcy of this country. SS and Medicare are already running in the red--Medicare (Part A) since 2008 and SS since 2010. The General Fund is picking up the shortfalls by redeeming the IOUs from the HI and SS trust funds. And we borrow 42 cents of every federal dollar spent, half from overseas.

What most people do not know is that by law 75% of the costs for Medicare Parts B and D come from the General Fund ($222 billion this past fiscal year.) The premiums only pay for 25% of the costs. Eventually these programs will consume the entire federal budget if not reformed.

20 posted on 11/09/2012 9:08:07 AM PST by kabar
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To: Cboldt

Good question ;)


21 posted on 11/09/2012 9:17:00 AM PST by lowbridge (Joe Biden: "Look, the Taliban per se is not our enemy.")
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To: memyselfandi59

Our devices are different, the hospital is the end-user. Insurance isn’t part of our equation. (as an aside, I had a Medtronic spinal stimulator put in on the 11th of Oct, removed on the 30th due to complications! :( )

Our product holds medications. The hospital nursing staff use our product. The Obamacare tax hits us hard.
Layoffs help ‘streamline’ our cost structure when dividends drop so the investor’s numbers look better. It has happened in the past and is bound to happen again.


22 posted on 11/09/2012 9:20:42 AM PST by SparkyBass
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To: Abigail Adams

My son works for Stryker and I’m worried.


23 posted on 11/09/2012 9:54:21 AM PST by surrey
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To: toast
Through my work I am also very involved with this product

.As far as the baclofen pump, I got mine just at the right time...my mobility was greatly impaired and before the wheelchair my neuro said, we could try ITB. And voila, after lots of PT, I was walking almost normally again.

FYI, since you work with the device, I found this a few months ago, they're are beginning to believe that ITB used early rather than later would keep a lot more people in the MS community mobile. I had access to the entire article, but this is the abstract.

http://msj.sagepub.com/content/17/5/623

24 posted on 11/09/2012 9:55:57 AM PST by memyselfandi59
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To: memyselfandi59

I believe the tax is on gross sales as opposed to net sales which is gross sales minus expenses.


25 posted on 11/09/2012 9:56:33 AM PST by Rusty0604
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To: SparkyBass

Okay, thanks for that explanation, it hadn’t dawned on me that a medical provider would be the end user.


26 posted on 11/09/2012 9:58:17 AM PST by memyselfandi59
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To: memyselfandi59

Thanks. I’ll check it out.


27 posted on 11/09/2012 10:09:36 AM PST by toast
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To: Rio
companies like stryker have directly or indirectly put millions in the obama bucket and also have put money against initiatives for conservative causes. stryker wanted obama, they should pay the penalty. simply google pat stryker and obama. hard to defend their tremendous profits which are funneled to family and then given to the dems. i’m not feeling sorry for stryker.
28 posted on 11/09/2012 11:04:41 AM PST by dreamerintexas
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To: Rio

Over the cliff; the RATS made the cliff now they should go over it. Later the Democrats can be seen as giving tax breaks to the rich.


29 posted on 11/09/2012 11:45:33 AM PST by Mike Darancette (Think 2014)
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To: Jedidah
"Not hidden.

"We’ve known about it for months, and there are many more like it.

We've known for almost 2 years. It's just that there is very little real journalism in Washington, so 98% of the population, including every single li

Why Romney went after the "Wheelchair Tax" I will never comprehend. They could have done a fantastic ad, a remake of the Ryan pushing the old lady over the cliff, but with Biden and Obama demanding she pay the tax before shoving her over the edge.

30 posted on 11/09/2012 12:36:07 PM PST by cookcounty ("When I speak, I say what I mean and I mean what I say!" ---Joe Biden, 10/11/2012)
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To: lodi90
"They bought it, they own it. Or if they must, amend the law as well to supprt religious exemptions."

At a minimum.

31 posted on 11/09/2012 12:38:38 PM PST by cookcounty ("When I speak, I say what I mean and I mean what I say!" ---Joe Biden, 10/11/2012)
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