Obama: No delay for medical device tax

WASHINGTON — President Obama has rebuffed a call from Senate Democrats to delay a tax increase on medical device manufacturers.

WCCO interviewed Obama at the White House on Thursday and asked if he would support delaying the implementation of the 2.3 percent tax increase on medical device company revenues, as Amy Klobuchar, Al Franken and 16 other Democratic senators requested last week. The tax is a component of Obama’s health care reform package.

Here’s Obama’s full response, from WCCO:

No. And here’s why. The health care bill is going to provide those health care companies, 30 million new customers. It’s going to be great for business and they’re doing really well right now and they’re going to get 30 million more customers as a consequence, so this additional tax essentially comes back to them as new customers. I think it’s very important for us to maintain the principal that A.) nobody should go bankrupt when they get sick in this country and B.) the providers of medical services should recognize they’re going to get a benefit from all of these uninsured folks suddenly having insurance and that means they should be willing to do a little bit in order to make that happen. It’s not just medical device folks, hospitals are doing a little bit more because they know now they’re not going to have uncompensated care in emergency rooms, everybody’s going to have some kind of insurance. Doctors, same kind of thing. So this is not unique to the medical device industry. The idea is that when you have 30 million more people coming in, you’re going to make money, you can do a little more to help facilitate and make sure people are getting the health care they need.

Last week, Klobuchar and Franken signed a letter asking leadership to consider delaying the tax increase. House Republicans, led by Rep. Erik Paulsen, passed a bill repealing the tax over the summer, though Paulsen says he would support a delay as well.

The device tax, set to kick in on Jan. 1, will raise about $30 billion over ten years to help pay for the Affordable Care Act, but tax opponents warn that it will do so at the expense of jobs — according to the device industry, up to 45,000 (though independent analysts say that’s an overestimate). There are about 400 device companies in Minnesota, employing about 35,000 people.

Devin Henry can be reached at dhenry@minnpost.com.

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Comments (2)

  1. Submitted by Patrick M on 12/14/2012 - 11:36 am.

    Shame on both of our Senators

    I am so disappointed in both Sen Klobuchar and Franken who are clearly pandering to the home crowd in opposing this medical device tax. These are both people I have proudly voted for and expected them to exercise leadership on the tough issues but fnd them coming up short. First the Stillwater bridge now this. I can see llittle rationale but for trying to please local special interest groups at the expense of the greater good in both cases.

    The device tax is a vital component in funding Obamacare. DO they explain what funding mechanism they would propose to replace it if the device tax were eliminated? I don’t see it. Other also object to the contributions they have to make to support funding the Afforable Health Care Act. If we entertained every objection there would be no way to provide health care for all Americans.

    It’s simply shameful that these otherwise worthy public servants lack the capacity to look these device makers in the eye and tell them “NO” . The people who elected them expect them to represent their views with their votes. We just had an election that was in many ways a referendum on Obamacare. Support the election results.

  2. Submitted by chris brooks on 12/17/2012 - 03:11 pm.

    Not all device manufactures are equal

    The dental prosthetic industry is not “doing really well” as Obama put it, labs are closing, those that remain open are failing (like the one I manage) this tax is going to hurt us. It’s going to make dentists send more of their work to China based labs, and large labs that offer much cheaper products so as to avoid cost increases as much as possible. This in turn will reduce the quality of the restorations going in patients mouths, and cause a lot of small businesses to close. Thanks Obama.

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