Federal lawmakers are trying again to repeal the medical device tax, which took effect this year.
The 2.3 percent excise tax is part of the Patient Protection and Affordable Care Act. It is expected to generate about $30 billion over 10 years to help fund the national health care law.
Rep. Erik Paulsen, R-Minn., announced Wednesday he has introduced the Protect Medical Innovation Act, which would abolish the tax. The House approved similar legislation drafted by Paulsen last June, but that bill was not considered by the Senate.
Rep. Marlin Stutzman, R-3rd, is a co-sponsor of both of Paulsen’s proposals.
His district includes Kosciusko County, where orthopedic device manufacturers directly employ 6,800 people and account for 6,200 related jobs.
Taxing success is no way to encourage job growth, Stutzman said in a statement. He added that studies have indicated the tax could eliminate 2,000 of Indiana’s 20,000 jobs in the medical device industry.
Brad Bishop, executive director of OrthoWorx, said in an email that Kosciusko device makers – including Biomet, DePuy, Medtronic, Paragon Medical, Symmetry Medical and Zimmer – have not released estimates on how many jobs or how much money the tax might cost them. OrthoWorx, a nonprofit group that supports the Warsaw-based orthopedics industry, favors repealing the tax.
Mark Leahey, president and chief executive officer of the Medical Device Manufacturers Association, issued a statement Wednesday supporting Paulsen’s legislation.
There is no question that the device tax is destroying jobs, eliminating investments in research and development and shelving plans for new medical technologies, all to the detriment of patient, Leahey said.
In a Tuesday speech to the American Enterprise Institute, House Majority Leader Eric Cantor, R-Va., called for the repeal of the medical device tax. And in December, 18 Democratic senators and senators-elect, including Indiana’s Joe Donnelly, sought a delay in the implementation of the tax.
President Obama has said the health care law will create millions of newly insured customers for medical devices, offsetting the expense of the tax.