ObamaCare’s Crippling Taxes

An excise tax on medical equipment, embodied in the ObamaCare law, is risking hundreds of thousands of Americans’ lives. It will reduce vital research in cutting-edge technologies and may well drive some companies out of business. The tax will fall on medical devices ranging from equipment to treat heart attacks to prosthetic limbs and wheelchairs for wounded veterans. The tax will result in job layoffs, as well, health industry officials predict.

Innumerable patients can be served by medical devices and new technologies if the medical device industry can bear the new tax. One large equipment maker, for example, who may be taxed out of business, explains why, according to an Oct. 14 report. The company makes equipment that could reduce our leading cause of death–heart disease–which killed more than 600,000 people last year. The company, Zoll Medical, makes electric paddles, called automated external defibrillators (AEDs). They can shock to life a stopped heart and restore its rhythm. A few years ago, these medical devices could be used only by trained professionals. A spokesperson for Zoll Medical said the 2.3 percent tax on medical devices will increase the company’s tax bill by an amount which could eliminate 80 percent of its profits. This would leave little resources to invest in future research and development.

Today, bright boxes with these electric paddles can be found at airports, doctors’ offices, even on the battlefield. Research has made the equipment easy enough to use by an untrained layperson, merely by following voice instructions that come with the AEDs, according to a report by Grace-Marie Turner, president of the health research organization, the Galen Institute. Her report was published in The Washington Times.

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The tax targets revenues, not profits, meaning device makers will have to pay the tax even if they’re not making a profit, pointed out Christophe (cq) Sevrain, owner of CJPS Enterprises, a medical device consulting firm in Troy, MI, according to a Sept. 6 Detroit News story. The tax could force some smaller businesses with low profits into the red. About 90 device companies are located in Michigan. Nearly all are small, with revenues under $10 million, Sevrain said. Some are on the brink of discoveries that could relieve chronic conditions or other medical handicaps.

Wounded veterans, along with many other Americans made the grievous mistake of believing Obama when he said repeatedly, “If you make less than $250,000 a year, you will not see your taxes increased by a single dime. The tax will be imposed on prosthetic limbs to replace those lost in battle and wheelchairs that make the injured more mobile. The tax contains no exemption for the country’s 22 million veterans. In fact, Senate Democrats specifically refused to exempt veterans from the tax, according to the non-partisan Americans for Tax Reform. On March 24, 2010, Senate Democrats rejected an amendment offered by Sen. Orrin Hatch (R-Utah) to the health care bill. The amendment would have prevented the medical device tax from charging veterans covered by the Veterans Healthcare Program.

During the ObamaCare debate when the Senate Finance Committee was scouring for more money, it put a “fee” on medical devices, The Wall Street Journal wrote that “the device makers made a ‘strategic mistake’ by not offering Mr. Baucus (D-Mont and chairman of the Senate Finance Committee) more protection money,” (in other words, political contributions). Baucus’s committee wrote the final Senate version of ObamaCare.

Sept. 8, Senate candidate Pat Toomey, running against Democrat Joe Sestak in the Nov. 2 election, charged that the ObamaCare medical device tax poses a threat to high-tech medical manufacturers. He was meeting with a number of medical technology executives. It included Pete DeComo, the CEO of ALung Technologies, who warned that when the tax takes affect in 2013 it would inhibit investment in research. ALung is a pioneer in the development of respiratory assist technologies, as an alternative to invasive respiratory support. DeComo said, “In an environment with onerous taxation and a complex business environment it has been shown that investor money goes elsewhere.” It is already happening in the United States with more and more venture capital being invested overseas where taxes are lower.

Thousands of products that are necessities of modern medicine, from MRIs and CT scanners to surgical equipment, will be taxed. Even safe sex will get more expensive, because Congress levied the tax on condoms. A spokesman for the Medical Device Manufacturers Association, which represents about 300 small and mid-size makers of medical devices, explained that many of the companies have new devices “that have not yet brought in enough money from sales to make a profit. But they still will have to pay the tax.” He said that 80 percent of the member companies have 50 or fewer employees, as an indication of size.

Tom Sommer, president of Massachusetts Medical Device Industry Council, “blasted the tax, saying it would stifle growth and put innovation in peril….In addition to job cuts and rollbacks on expansion plans, you’re going to see a reduction in R&D spending, innovation in this industry is definitely in jeopardy, which is shameful,” he told MassDevice, an online publication. Dr. James Muller is founder and CEO of InfraReDx, which is developing a spectroscopy catheter to detect the intracoronary composition of plaque. He said, “If you’re successful, they’re going to tax you. It’s wrong and not in the best interest of the U.S. We hear about China and India overtaking us. We’re swimming upstream here.”

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In California and Minnesota, legislators have introduced bills to repeal the tax, reported Mark Leahy, CEO of the Medical Device Manufacturers Association. He said the industry would like to see the law modified to give smaller companies relief. This would allow startup companies to ramp up before they’re hit by the tax.

Money aside, the medical device surtax discourages innovations that could improve our health and save our lives, enabling us to help preserve our reputation as the “medicine chest for the world.”

“Physician shortages widespread in state, report says
Half of primary care practices in Massachusetts are closed to new patients and wait times
for appointments continue to be long, according to a new survey released today by a
statewide physicians' association.
All told, 10 of 18 specialties also have shortages and all of the state’s community hospitals say they are having a hard time filing vacancies.”

ObamaCare’s Future, In Massachusetts Today ”Supporters of ObamaCare often argue that the new health care law is a lot like
Massachusetts’ reforms. But that program increasingly is running into problems with
costs and Bay Staters are becoming craftier about gaming the system.
Health insurers have filed suit against the state insurance commissioner:
Nearly a week after Massachusetts regulators disapproved 235 of 274 rate increases filed
by health insurers, citing the rising cost of care, a group of six companies is suing the
state for a move it says will “likely cause greater costs and confusion.”

“Many Massachusetts residents now have insurance coverage but can't find a physician.
…56 percent of Massachusetts physicians in internal medicine aren't accepting new patients.
…new patients fortunate enough to secure an appointment with a primary care doctor have an average waiting time of 44 days! .”

“Cahill bashes (MA) state -- and national -- health care reform law
State Treasurer Timothy P. Cahill, an independent candidate for governor, today offered
a wide-ranging and scathing criticism of the state’s universal health care law, saying it is
bankrupting Massachusetts and will do the same nationally, if a similar plan is passed in
Congress.
"If President Obama and the Democrats repeat the mistake of the health insurance reform
here in Massachusetts on a national level, they will threaten to wipe out the American
economy within four years,” Cahill said in a press conference in his office.
Echoing criticism leveled by Congressional Republicans in recent weeks, Cahill said, “It
is time for the president, the Democratic leadership, to go back to the drawing board and
come up with a new plan that does not threaten to bankrupt this country.”

“In his defense, Romney admitted to Fox that about half of the real costs of “extending
coverage to the uninsured” (aka forcing young, healthy people to buy expensive
insurance they don’t need) is covered by federal tax dollars. In other words, as expensive
as it is, without federal subsidies it would cost even more.
So when there’s a federal Obamacare plan, who do we taxpayers turn to for our
subsidies? China? The United Nations? Mr. Spock and the United Federation of Planets?”

“Mr. Romney's subsidized coverage is meanwhile doing what entitlements do: crowding
out private insurers, compounding the cost explosion, walking the state toward rationing.
So long as the former governor clings to these central points of his health plan, he's on
the wrong side of free-market policy and public opinion.

This isn't going away for Mr. Romney either, which is why he'd do better by writing off
his own plan as a mistake that Democrats have made worse, and replacing it with a
proposal that deregulates and reforms the private market to lower insurance costs
(thereby achieving greater coverage).”

From CATO (the whole article is worthwhile): “Before RomneyCare was enacted, estimates of the number of uninsured in
Massachusetts ranged from 372,000 to 618,000. Under the new program, about 219,000
previously uninsured residents have signed up for insurance. Of these, 133,000 are
receiving subsidized coverage, proving once again that people are all too happy to accept
something “for free,” and let others pay the bill. That is in addition to 56,000 people who
have been signed up for Medicaid. The bigger the subsidy, the faster people are signing
up. Of the 133,000 people who have signed up for insurance since the plan was
implemented, slightly more than half have received totally free coverage.

“Health Care Speechwriter for Edwards, Obama & Clinton Now Without Health Insurance”
I'm a critic because what Washington is talking about doing
has made health insurance unaffordable in Massachusetts.

“Small businesses bridle at health insurance hikes (Romneycare strangles Mass. businesses)
some really bad news from Blue Cross-Blue Shield: His company’s health insurance rates are going up 47 percent in January.”

“ Rationing medicine has already begun
… government-
run health care has introduced rationing and waiting lists and cost the lives of the people under its provisions.”

“DEATH PANELS OPEN FOR BUSINESS IN MASSACHUSETTS”

“President Obama's newly confirmed regulatory czar defended the
possibility of removing organs from terminally ill patients without their permission.”

“You can’t reap these savings without limiting patients’ choices in some way," said Paul Levy, CEO of Beth Israel Deaconess.”

“State plan may place limits on patients’ hospital options( Mass. RomneyCare )”

Here's a thought. We know fairly well who the politicians and staffers are who came up with the idea of taxing medical devices which means action can be taken against them directly.

With respect to the House and Senate members we can prohibit them from belonging to any committees or subcommittees. Just leave them cooling their heels for the duration of their terms.

The staffers can be prohibited entry into the US Capitol or the various offices used by Congress or members of Congress elsewhere or around the country.

Today, bright boxes with these electric paddles can be found at airports, doctors’ offices, even on the battlefield.

My son's police department has one in every squad car.

A spokesperson for Zoll Medical said the 2.3 percent tax on medical devices will increase the company’s tax bill by an amount which could eliminate 80 percent of its profits.

Just another tax that will be passed along to the consumer. (Only those making more than $250,000 though)

This ass hole of a president promised not to raise taxes on the "poor and middle class" and one of the first things his administration did was add $1.00 tax, per pack, to cigarettes. Does he really think only the "rich" are smokers? Studies show the opposite.

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