Medical-Device Excise Tax Kills Jobs, Obamacare Kills Much More
The sweet smell of success for the medical-device industry is wafting over Capitol Hill. News from Senator Orrin Hatch (R-UT) is that the Senate will take up repeal of the medical-device excise tax. This is a tax of 2.3 percent on most medical devices that was passed as part of the Affordable Care Act to fund Obamacare.
AdvaMed, a trade association representing the medical-device industry, has just published another survey of its members, which reports on the tax’s impact on jobs:
According to the survey, the tax has led to employment reductions of approximately 18,500 industry workers and will lead to forgone hiring of 20,500 additional employees over the next five years. The total impact of the tax on medical technology industry employment is approximately 39,000 jobs. Additional jobs will be lost in companies providing supplies or services to the industry. Forty-six percent of respondents said they would consider further employment reductions if the tax is not repealed. On the positive side, 71 percent of respondents said they would reinstate forgone hiring if the tax were repealed.
These results are largely in line with research published in 2012 that forecast job losses due to the tax, which I discussed in a Forbes column last summer.
39,000 jobs lost is nothing to take lightly. Nevertheless, let’s not forget that Obamacare itself will cost 2.0 million jobs by 2017. Repealing the medical-device tax is fine, but repealing Obamacare is far more important.
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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.