Coats: Momentum Building on Medical Device Tax Repeal Bill
“Bipartisan support for this bill sends a strong message to the president that we must repeal this tax that will jeopardize jobs, increase costs on consumers and impede innovation.”
WASHINGTON, DC – Senator Dan Coats (R-Ind.) today supported bipartisan legislation led by Senators Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.) to repeal the 2.3 percent excise tax on medical device manufacturers that was included in President Obama’s 2010 health care law. Coats supported identical legislation in the 112th Congress, and now the bill now has gained the support of several Senate Democrats.
The tax on medical devices took effect in January and is expected to cost device manufacturers roughly $194 million per month, putting 43,000 American jobs at risk, according to the Advanced Medical Technology Association (AdvaMed).
"I am pleased that several Senate Democrats now are supporting a full repeal of this misguided tax,” said Coats. “Bipartisan support for this bill sends a strong message to the president that we must repeal this tax that will jeopardize jobs, increase costs on consumers and impede innovation. This bad policy unfairly punishes a successful industry that not only provides jobs to thousands of Hoosiers and Americans, but also enhances the lives of patients around the world. Now with bipartisan support, I urge Congress to pass our legislation and repeal this damaging tax.”
A 2011 study released by AdvaMed analyzed the potential effect of the health care law’s device tax on employment in the medical device industry. According to this report, an estimated 2,124 Hoosiers could lose their jobs and the tax will likely result in American manufacturers shutting down plants in the U.S. and replacing them with plants in other countries.
Under the health care law passed in 2010, medical devices - ranging from surgical tools to bed pans – are being hit with a 2.3-percent excise tax as of January. One Indiana manufacturer, Cook Medical of Bloomington, previously estimated that the tax will cost the company $15 million to $20 million per year.
Indiana is one of the world leaders in the development of medical technologies that enhance and save the lives of Hoosiers and patients around the world. Indiana is home to more than 300 FDA-registered medical device manufacturers, employing 20,000 Hoosiers directly and another 28,000 indirectly. These are jobs that pay, on average, 41 percent higher wages than the state wage rate in Indiana.
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