Obamacare: Congress passed it, now they are reading it

A piece of Obamacare imposes a tax on medical device manufacturers.  Members of Congress now seem horrified.  It is almost as if “someone” hid this provision from them…except, they are the “someone” that wrote it and passed it.

Obamacare imposes a 2.3%  excise tax on medical device manufacturers.  Q-tips and eye glasses are exempt, but not much else.  The insidious part is that the tax is imposed upon gross sales, not on the manufacturer’s profits.  So, if a manufacturer today has only a 2% profit margin, as many small manufacturers do, now what?

…the Internal Revenue Service is now writing rules that will treat some of medicine’s most inventive and complex products the same way it does gas, cigarettes, liquor and wine, guns, airline tickets and tires. Those are the commodities on which the political class normally attaches excise taxes, and the appeal is that the levies are hidden in higher prices, rather than listed separately like a sales tax. This is somewhat awkward for a law that claims to aspire to make health care more ‘affordable.’

But, there is a problem. 

The providers will also be hurt from the device tax because of something they don’t like to mention, which is the government’s price controls. Medicare and Medicaid pay fixed rates per procedure, such as replacing a hip, and the rates don’t change when device prices do. So a hospital that must buy a higher-cost joint due to the device tax will have a smaller share of the reimbursement.

Springing to the rescue is none other than Elizabeth Warren, (D. Ma.), who the Wall Street Journal affectionately calls “the liberal papoose”, and Senator Al Frankin (D. Mn.).  Both are urging the passage of bills that will kill this tax.

Why, these two you ask?

Massachusetts is the home of many small, start up medical device manufacturers and this excise tax could put them out of business.  Minnesota is the home of Medtronics, one of the largest medical device manufacturers in the country.

Where will these companies and their groundbreaking innovations go?  

Overseas, of course. 

Gee, and all the time I thought President Obama was trying to create jobs in this country and lower the cost of health care. 

Silly me.

 

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SoundOffSister

The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.

10 Comments

  1. Plainvillian on May 29, 2012 at 9:34 pm

    Isn’t this just one more example of the efficiency and efficacy of central planning?? Shouldn’t we just embrace our inner Alfred E. Newman?



    • phil on May 30, 2012 at 7:57 am

      I think Congress already has.? And Bobo certainly has that “What, me worry?” look.



  2. Jeff S on May 30, 2012 at 9:13 am

    All they had to do was listen to the SOS, the one who actually read the bill, and they would have known what was in the bill.



  3. JBS on May 30, 2012 at 11:57 am

    The word perfidy comes to mind. As in deception. The entire 2700 pages of the “Affordable Care Act” is loaded with provisions detrimental to businesses and the economy. Everything about this Regime and these Democrat Congress Critters is about perpetuating the lie: “We are the government and are here to help you.” LOL
    Placing an excise tax on the manufacture of medical devices plays well into the Regime’s aim of killing domestic jobs and businesses.
    Anyone still drilling for oil on “government” land in the US?



    • stinkfoot on May 30, 2012 at 5:24 pm

      The key is in how the lie is framed… “we are the government and we are here to help you…”? -help us what? surely they are not stupid enough not to realize that the “Affordable Care Act” is going to sink the economy and turn the middle class into an underclass that is dependent on the government for handouts.? Rush has repeatedly said that the attempted destruction of the economy is deliberate and I’m starting to believe him.? Pelosi’s, “You have to pass it to find out what’s in it” is a huge tell that she knew what the true effect would be and couldn’t care less how it is going to affect the middle class.? These criminals need to be removed from office



    • Lynn on May 31, 2012 at 4:42 pm

      I don’t agree with Rush very often, but he is right here. ?The destruction of the economy by this administration is very deliberate and the laughable Affordable Healthcare Act is part of the proof.



  4. Dimsdale on May 30, 2012 at 7:15 pm

    Letting a politician regulate your healthcare (or anything for that matter) is the same as giving a baby a hand grenade.



  5. JBS on May 30, 2012 at 8:13 pm

    Nice analogy. May I add that both are expensive to keep.
    As an addendum to stinkfoot’s post, in the ACA, it’s the politicians and bureaucrats who will be taken care of first and will be perpetuated. Pelosi, as an example, is well provided for; I am sure she could care less as she was only currying favor as a useful tool at the time and thus serving the (DNC) machine.



  6. PatRiot on May 30, 2012 at 9:24 pm

    SOS,? I’m beggin’ ya….. please run for office.



  7. PatRiot on May 30, 2012 at 9:37 pm

    I will bet you… in small print on the last page it?says ” Screwed you again.??Gotta go before it hits the fan”.?
    Love,
    Chris “you can’t sue Wal Streeters” Dodd and Barney ” I ‘m not totally gay, I screwed Sallie Mae” Frank.
    ??? P.S. We did a three some?with the mortgage industry.?
    P.P.S.S.??Look for Chris?spinning a holywood script.? And who knows where you find Barney in the end.???
    Hey… Product placement has worked with George Stephanopoulos hasn’t it???



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