Journal Gazette - Medical Device Tax Repeal Important Part of Health Care Reform

Op-Ed

By Jim Banks

Just as in every part of our country, northeast Indiana has felt the effects of Obamacare over the past seven years.

While some Americans have benefited under the health care law, far more have faced skyrocketing premiums, decreased coverage or loss of a doctor.

But in our region, Obamacare's negative impact has extended even further. The law's inclusion of a 2.3 percent excise tax on medical devices has affected our regional economy and penalized local companies. Its potential return could jeopardize thousands of Hoosier jobs, which is why this tax must be repealed in full.

Northeast Indiana is home to dozens of medical device manufacturers, the majority of which are based in Warsaw. In fact, Warsaw is often referred to as the "Orthopedic Capital of the World." Estimates indicate that medical device companies in our region control 34 percent of the worldwide orthopedic market.

Medical device manufacturing also is important to our state as a whole. Indiana ranks second in the nation in exports of life sciences products, and a job with a Hoosier device manufacturer pays 56 percent more than the average wage in Indiana.

In Indiana and across the country, medical device companies invest hundreds of billions into the American economy every year, employ more than 400,000 Americans and create life-saving technologies that benefit people all over the world.

In 2013, Obamacare's 2.3 percent tax on medical devices went into effect, forcing device companies to pay one of the highest corporate tax rates in the world. According to Commerce Department data, more than 28,000 jobs in medical device and related industries were lost across the country while the device tax was in effect. Over a two-year period, device manufacturers were forced to scale back investments in life-saving medical technologies by $814 million.

Fortunately, the medical tax was temporarily suspended at the beginning of 2016, allowing many manufacturers to resume a portion of research and development and investment activities previously lost due to the tax. The Advanced Medical Technology Association, which represents hundreds of device manufacturers, has surveyed its members about the suspension of the device tax. As a result of the suspension, 73% of respondents have either increased or avoided reducing their total employment, 33% have invested in new research facilities and 83% have increased or not reduced research and development spending.

A lasting repeal of the medical device tax will make these benefits permanent. With the medical device tax set to go back into effect at the end of this year, Congress must take action this year to permanently repeal this tax. Failing to do so will result in stifled innovation, job losses and decreased patient access to technology that enhances the lives of patients around the globe.

In May, I voted for the American Health Care Act (AHCA), legislation to repeal and replace Obamacare. This bill is a significant step forward from the failures of Obamacare and has many important reforms that will benefit Hoosier families, including a permanent repeal of the medical device tax.

The Senate version of health care reform released Thursday also includes a full repeal of the medical device tax. It is vital that it be included in any legislation the Senate passes. The stakes are too high for our region, our state and the entire country.

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