A new tax on medical devices — everything from bed pans to pacemakers — went into effect in January.
But that isn’t stopping lawmakers from the life-sciences hub of Pennsylvania from trying to repeal the tax.
Sen. Pat Toomey’s response to President Barack Obama’s State of the Union address was just four paragraphs long, but he dedicated one of those paragraphs to bashing the tax.
“(The) medical device tax is job-crushing and costing us thousands of jobs in Pennsylvania,” said Toomey, a Republican. “Repealing it would be very pro-growth.”
Toomey and Sen. Bob Casey, a Democrat, were two co-sponsors on a bill to repeal the tax introduced in the U.S. Senate last week. A similar measure with bipartisan support was passed in the House last year but was never taken up by the Senate.
“This year it’s different,” said Chris Molineaux, whose organization Pennsylvania Bio has been lobbying against the tax since the Affordable Care Act was passed in 2010.
“The difference now is that the election is behind us, and Senate Democrats have been given permission, if you will, or given the green light, to look at provisions of the Affordable Care Act that need to be fixed.”
In Pennsylvania, 22,000 people work in medical device manufacturing, according to Molineaux.
One of them is Baruch Ben Dor, president of InfraScan, a small startup housed at the University City Science Center in West Philadelphia. He said he is already feeling the effects of the tax.
“We were planning expansion of our team, but with our budget, and now our reduced budget, we will be able to hire less people than we were planning,” Ben Dor said.
The tax takes 2.3 percent of gross revenues, not profits, so Ben Dor is paying it though his startup is not making money yet.
The tax is designed to bring in $30 billion for health care over 10 years.
Supporters of the tax have said the additional cost will be offset by the millions more consumers who will be insured under the federal health-care law.