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The Newest OUTRAGE With The Medical Device Tax Repeal

Category: Erik Paulsen
Posted: 01/20/15 09:54

by Dave Mindeman

Right now I am having trouble controlling my anger. I am fed up with the representation that Minnesota gets in Congress - FED UP - with both Democrats and Republicans. The outrage is more than I can bear.

What has me in this state is the "newest" version of the Medical Device Tax repeal and the accompanying corporate greed and manipulation that is so evident in how Erik Paulsen and his cohorts (on both sides of the aisle) are approaching this.

I have talked about this many times. The Device Tax is part of the financial foundation for Obamacare - yet the Medical Device Tax industry has whined about this from the beginning, and our Minnesota delegation has been all too willing to respond.

But this is beyond the pale....

Republicans and many Democrats in Congress want to repeal the roughly $3 billion-a-year tax on medical devices that's part of the Affordable Care Act. Undoing the tax will mean a big boost in profits for the industry. But there's another business windfall buried in the bills that Congress is considering. Not only would the future tax be repealed, but the taxes already collected would be refunded. Any company that had paid the tax would get its money back.


Yet, all 10 - YES ALL 10 - of our Senators and Representatives are signing onto this. It is a sham, a scam, an outrage, and a corporate manipulation of the highest order.

Even Rep. Keith Ellison, the most progressive of the progressives, the most liberal of all liberals is going along with this. And his reasoning?....

"Look, I don't ever begrudge any member of Congress for looking after the jobs in their own district," Ellison said. "And that's what I'm doing here."

Really? Looking after your job? I seriously doubt that the Medical Device companies in Ellison's district have some kind of lock on a large number of votes that can defeat Ellison in the next election. No...they have corporate money that can manage that just fine....via lobbying or political donations or buying a message...all of that is enough for Rep. Ellison to "look out for his job".

Good Lord this is is nuts.

And why is it so important to repeal this? Well, the industry always has the same answer....

Shaye Mandle, CEO of the trade group LifeScience Alley, argued that a refund is appropriate because the tax has led medical device companies to lay off workers and halt expansion plans. "It's an attempt, effectively, to repair the negative aspects of what the device tax has ultimately done to the industry," he said.

And the ACTUAL evidence of "damage" since the device tax took effect in early 2013?

A recent study by the Congressional Research Service estimated that at most, the entire industry may have lost 1,200 jobs due to the tax and likely lost fewer than 100. Figures from the Bureau of Labor Statistics show little change in the industry's employment over the past few years.

The industry pays $30 million a year to lobby Congress - and apparently it is money well spent. If this is repealed (and refunds are given which could amount to $6 BILLION), then that will leave a gaping hole in the financing of Obamacare. And guess who will make that up? You and me. They can just stick us with the bill because we don't have multi-million dollar lobbyists looking out for our interests. No, we have to protect all the corporate whiners. Protect their profits. Their right to merge with other companies overseas so they can get out of paying taxes altogether.

This all reeks to high heaven - and I wish I could just blame it on Erik Paulsen who is as much of a corporate shill for the Medical Device industry as John Kline is for the For-Profit Colleges. I wish I could just blame him - but I can't. Because Democratic hands are dirty here as well.

This isn't Democracy - this is business. Just pure and simple business.
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The "Onerous" Medical Device Tax Is Actually Not So "Onerous"

Category: Erik Paulsen
Posted: 11/17/14 06:36

by Dave Mindeman

In the Star Tribune there is an Op-Ed about the Medical Device Tax from an industry investor....

Ron Way, of Edina, is an investor representative on the boards of five medical start-ups.

The points he makes are the same points this blog and others have been making for some time....

While previous repeal attempts have failed, this time the repeal forces -- including Minnesota Democratic Sens. Amy Klobuchar and Al Franken and Republican Rep. Erik Paulsen -- will gain important leverage as leaders of the incoming Republican majority look for ways to emasculate the ACA But repealing the tax would amount to coddling a wealthy special interest at the expense of those least able to pay for health care.

(Bold emphasis is mine).

Oh, so true. And Mr. Way also gets to the heart of the repeal arguments:

1. "The tax will cause the export of 42,000 jobs," says the industry. But a Bloomberg analysis found the claim "not credible." The reality is that there's zero incentive to ship jobs overseas because the tax applies only to domestic sales and imports but not to exports, which are half of the estimated $110 billion in annual medtech revenue.

2. "The tax will increase device cost." The same Bloomberg analysis and the nonpartisan Congressional Research Service said that the tax is too small to affect demand and that consumers will scarcely notice.

3. "The tax will suppress research and development." Hardly. Every credible analysis shows that the ACA will increase demand, which is strong incentive to develop better, less costly devices. Indeed, there already is increased research and development (R&D) investment in companies and in small start-ups where much innovation occurs.

As usual, the "onerous" medical device tax has not been the industry problem that repeal opponents have predicted with such "certainty".

Will our Congressional delegation listen to the other side? I doubt it. The lobbyists always seem to win out in the end.

Mr. Way concludes with the reality....

In the 20 months that the tax has been in place, the financial calamity predicted by the industry has not happened. Simply, there's no credible basis for repealing the tax.

So true.
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Medical Device Tax Repeal - Another Ploy To Undermine The ACA

Category: Erik Paulsen
Posted: 11/05/14 17:56

by Dave Mindeman

It is worth noting that during his news conference, Mitch McConnell mentioned some specific items that they would probably work on when his caucus gets control of the Senate. One of those items was the Medical Device Tax.

Mitch will have the support of just about every member of the Minnesota delegation. He may have an issue there that he can tout as truly bipartisan.

But let's try to get around the medical device industry glee for a moment and talk about how this fits into a bigger picture.

The Medical Device Tax is NOT killing jobs. It is NOT stifling innovation. The Medical Device industry thrives and when they are not looking for other taxes to evade (i.e. Medtronic's Irish ploy), the device tax itself is not putting a dent into sales or profits.

But what is important to note is that the medical device tax is part of the Obamacare financing system. The ACA cannot operate as a means of expansion of the insured or a method to keep costs down via exchanges and subsidies or as a method of moving Medicare solvency into the future....unless the entire system functions together as a self contained unit.

Take away the device tax and you leave a funding gap. A gap that will lead to a health care financing deficit. A gap that will allow Republicans to say that Obamacare is costing the country money.

Something to note from the linked article above:

The four-year-old Affordable Care Act has never been overwhelmingly popular with Americans, but the provision imposing a special tax on devices to fund the overall operation of the law has been the target of criticism from Republicans and Democrats alike. Minnesota's Democrat senators have both supported suspending the tax, and the leaders of the new Republican majority in the Senate have long wanted to repeal it.

Now do you think the voters went to the polls yesterday and thought to themselves - "I'm going to vote Republican to get rid of that onerous medical device tax."???

The answer is no. In fact, take a half dozen people off the street and ask them what it is and they wouldn't have a clue.

This is only of import to the medical device industry. They do not want to add a tax to their products. In reality it costs them nothing, but they don't want to have to deal with it or add it to their cost structure. It is a nuisance and they know that their presence in Minnesota has some clout with our Congressional delegation.

Another important note from the article...

The Internal Revenue Service began collecting the tax in 2013, and it did not send the industry into a financial nose-dive.

No, in fact, the industry has been thriving because more people are able to utilize their insurance to obtain these devices. The medical device tax has done the exact opposite of the industry's prediction.

And another thing...

Any stand-alone device-tax bill would face a likely veto threat by President Obama.

It will be vetoed because repealing the tax without an offset would cause a gaping hole in the ACA's funding. And that would lead to a structural problem within the intricate framework of how the ACA works and is paid for.

Here is more troubling news....

(Sen. Amy) Klobuchar, this year, offered an amendment to a bill that would have suspended collection of the tax for two years, but then-Sen. Majority Leader Harry Reid refused to allow inclusion of the measure. Sen. Al Franken, a Democrat who was re-elected Tuesday, also supported the suspension.

As part of a Republican controlled Congress, this measure can probably pass the Senate. But notice that it is a suspension without offsets. None of the money will be replenished from other sources. It will cause a deficit in funding - the kind of deficit that Republicans are supposed to be against. The kind of funding gap that ads to the national debt.

It is another ploy to undermine the structure of the ACA...and it looks like Democrats are going to allow it to happen.

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