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Medical device makers: Jan. 1 tax could cost jobs

Published on NewsOK Modified: December 28, 2012 at 4:07 pm •  Published: December 28, 2012

Medical device companies employ nearly 24,000 people in Massachusetts, who earn an average salary of $66,787, according to research by the Advanced Medical Technology Association, a national industry group.

Defenders of the tax say it is perfectly reasonable to ask industries that stand to benefit from the federal health care law to help shoulder the costs of implementing it. That was the precisely the argument Obama made in June when he pledged to veto the House bill if it reached his desk. The White House said medical device makers and industries like it stand to gain 30 million potential new customers who would have access to health insurance under the Affordable Care Act.

John McDonough, a professor at Harvard University's School of Public Health, said the law was designed to be fully paid for and not add to the federal debt.

"Every other segment of the health care industry has said yes, we understand this is important ... and we need to be part of the solution in financing this as opposed to raising the taxes of everyday Americans or adding the cost of this law to the federal debt," McDonough said.

"And it's really only the medical device industry that has said no," he added.

The industry, meanwhile, disputes the notion that the health care law will be a boon for business.

According to Sommer, the heaviest users of medical devices are older Americans already covered by Medicare, not younger people who will gain insurance under the law.

"They are not using coronary stents. They are not having their hips replaced, or their knees replaced," Sommer said. "They're not having the large number of procedures that older people do."

Industry officials add there is no evidence the 2006 universal health care law in Massachusetts, which served as a model for the national plan, led to an increase in sales in the Bay State.

"For us, this isn't a health care policy issue ... this is fundamentally an issue of corporate taxation," said J.C. Scott, chief lobbyist for the Advanced Medical Technology Association. "If Congress intends to have a conversation around corporate tax reform, we think this should be a central component."