WASHINGTON (March 27, 2 p.m. ET) — A new tax authorized by the federal healthcare law could cost 39,000 jobs and $8 billion in economic output each year when it goes into effect in nine months, according to an economic analysis issued Monday.
The analysis by the Battelle Memorial Institute, a contract researcher, for the Advanced Medical Technology Association, calculated the size and scope of the medical-device industry and the effect of a $3 billion “event” on the industry — or about the estimated size of an annual tax on the devices authorized by the Patient Protection and Affordable Care Act. The 2.3% excise tax is scheduled to begin January 2013.
“The new tax on medical innovation takes our industry and our economy in exactly the wrong direction,” Stephen Ubl, president and CEO of AdvaMed, said in a news release issued with the economic analysis. “It is time to repeal this anti-competitive, counterproductive, job-killing tax.”
That is a slightly smaller impact than the loss of 43,000 jobs that an analysis by two economists estimated would result from the tax, which was issued by the trade group in September 2011.
Supporters of the law have dismissed the industry's objections to the tax as overstating its impact because they assume insurers will pick up the cost.
The Internal Revenue Service has issued draft regulations implementing the tax and is accepting comments until May 7.
Meanwhile, at least five different device tax repeal bills have been introduced in Congress but none have advanced.
