DARKE COUNTY — Though the recently passed “Omnibus” budget bill signed by the president has received criticism from many national business leaders and Republican politicians, two local entities — the Darke County Chamber of Commerce and Midmark Corporation — celebrated one part of its passage as a victory.
Signed into law by President Barack Obama December 18, 2015, the Consolidated Appropriations Act of 2016 includes a two-year moratorium on the medical device excise tax.
Under the tax, manufacturers of medical devices would be required to pay a 2.3 percent excise tax on products ranging from surgical tools to bed pans. The tax was originally enacted as part of the Affordable Care Act (ACA) in 2010 and slated to begin January 1, 2013.
The Darke County Chamber of Commerce took a keen interest in the subject as the county is home to Midmark Corporation, a manufacturer of medical, dental and animal health products headquartered in Versailles, Ohio, and not coincidentally, Darke County’s largest employer.
In 2012, the Legislative Committee of the Darke County Chamber received a written request for legislative advocacy from Midmark with regard to repeal of the tax. The Chamber’s Board of Directors voted to provide advocacy for Midmark by supporting H.R. 436 — the “Health Care Cost Reduction Act of 2012” sponsored by Rep. Erik Paulsen (R-Minn.), which sought complete repeal of the tax.
The bill passed the House, but did not make it through the Senate.
The Darke Chamber’s efforts did not go unnoticed, however. On April 10, 2013, the Darke County Chamber received the Ohio Chamber of Commerce 2013 Best Advocacy Campaign Award for its efforts on behalf of Midmark Corporation.
“On behalf of Midmark Corporation, I would like to express our sincere appreciation to Sharon Deschambeau, the Darke County Chamber of Commerce and their 400 members for the legislative advocacy support related to repeal of the Medical Device Tax portion of the Patient Protection and Affordable Care Act,” said Midmark Chief Operating Officer R. Gregoire Blackmore.
Though the effort to nix the tax entirely in 2012 did not come to fruition, the medical business industry continues to apply pressure.
Midmark was one of nearly 1,000 corporations and associations that wrote a January 2015 letter to legislators in Washington, D.C, stating that “implementation of this excise tax — now estimated to collect approximately $25 billion in taxes — is adversely impacting patient care and innovation, and will compromise patient access to cutting edge medical technologies.”
Other points raised were that the tax “stifles innovation” and that it is “not being offset by increased demand for medical services.”
“At a time when the federal government is working to promote investment in U.S. industries of the future,” the letter concluded, “it is inconsistent that a tax of this magnitude is placed on the medical device industry. We must do all we can to encourage and promote research, development, investment and innovation. Instead, increased taxes, such as this one on the medical device industry, coupled with the increased regulatory uncertainty the industry also faces, is leading to further job losses, hindering the development of breakthrough treatments and delaying patient access to medical technology.”
Those seeking the death of the tax have friends on Capitol Hill, with Sen. Rob Portman (R-Ohio) signing onto the “Medical Device Access and Innovation Protection Act (S.B. 129),” introduced by Sen. Orrin Hatch (R-Utah), which seeks to eliminate the tax entirely.
“I support repealing and replacing Obamacare, and getting rid of the medical device tax is a good place to start,” Portman said. “Ohio is home to many medical device manufacturers and I’ve had employers tell me that this tax is especially burdensome and could potentially force them to lay off workers. This bipartisan and commonsense legislation is an important step toward reducing the negative impact of Obamacare and helping people keep their jobs.”
S.B. 129 has not yet advanced through the Senate.
Though the delay in the medical device tax can be seen as a win, the ultimate goal among many nationally and locally, is its repeal.
“The medical device industry is uniquely American. While the suspension of the 2.3 percent medical device tax in 2016 and 2017 will allow the industry to refocus on R&D investment and creating jobs, the Darke County Chamber continues to support the repeal of the medical device tax,” said Darke County Chamber President Sharon Deschambeau.