Wilmington News Journal - Looming Tax Worries Ferno CEO

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By Gary Huffenberger

With Wilmington manufacturer Ferno in mind, U.S. Rep. Mike Turner said Wednesday he will reintroduce a bill to eliminate a tax on first-responder medical equipment -- a tax that is part of the federal health-care insurance law enacted last year.

On the one-year anniversary of the health-care legislation being signed into law, Turner on Wednesday visited Ferno-Washington at the Wilmington Air Park to meet with Ferno executives and the news media.

"I think in this House [of Representatives], there's going to be a number of bills that move forward addressing the negative effects of Obamacare. And I'm certainly going to be advocating for this [proposed bill] to be one of them," Turner said.

The bill would carve out an exemption for emergency medical equipment from an excise tax on medical devices that's included in the Patient Protection and Affordable Care Act.

The excise tax provision "places an undue burden on manufacturers of life-saving equipment. Driving up the cost of their products discourages budget-strained municipalities from investing in new equipment, and stunts the growth of our struggling economy," said Turner.

Ferno makes emergency medical equipment that will be subject to a 2.3 percent excise tax starting in 2013 unless the section of the law concerning the tax is eliminated.

Ferno CEO Joe Bourgraf said the tax will hurt job creation and retention at Ferno.

The "easy way to look at this," said Bourgraf, is the average corporation has a 5 percent return on its investments.

"Take 2.3 percent out of it, and you're cutting your profits in half," he said.

Among other things, proponents of the excise tax argue that revenue for medical device manufacturers will go up as insurance coverage expands, but Turner said that reasoning does not apply to emergency services.

Increases in the number of people insured will not substantially increase the number of emergency medical service transports, says a media release from Turner's office.

"Leaving this tax in place will increase the cost of emergency care and inhibit innovation and employment at manufacturers of emergency medical equipment," according to the release.

Turner said he's hopeful this Congress will move bills that repeal portions of the health-care insurance law "that have unintended and negative consequences."

He added, "Local governments are struggling. They don't have additional resources and as we look to try to support our first responders, we need to repeal this tax."

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