IRS finalizes new tax for medical devices in healthcare law
WASHINGTON (Reuters) - The U.S. Internal Revenue Service on Wednesday released final rules for a new tax on medical devices, products ranging from surgical sutures to knee replacement implants, that starts next year as part of President Barack Obama's 2010 healthcare law.
The 2.3-percent tax must be paid, effective after December 31, by device-makers on their gross sales. The tax is expected to raise $29 billion in government revenues through 2022.
Companies including Boston Scientific Corp, 3M Co and Kimberly-Clark Corp have been lobbying the U.S. Congress for a repeal of the tax.
A repeal bill passed the Republican-controlled U.S. House of Representatives in June, but it has not been voted on by the Democratic-controlled Senate.
Many medical devices that are sold over-the-counter - such eyeglasses, contact lenses and hearing aids - are exempt from the tax, as are prosthetics, the IRS said.
The tax applies mostly to devices used and implanted by medical professionals, including items as complex as pacemakers or as simple as tongue depressors.
Products sold for humanitarian reasons, such as experimental cancer treatment devices, are not exempt from the tax.
Some medical device companies are hoping to delay the tax's start date as part of a resolution of the "fiscal cliff" deadline at the end of the year involving many tax and spending measures, said Steve Ferguson, chairman of Cook Group Inc.
"We would like to be part of the punt," Ferguson said, referring to an extension of current tax policy into 2013.
In one potentially problematic aspect of the tax, companies selling dual-use products to medical and non-medical customers must pay the tax on those products, potentially putting them at a competitive disadvantage, said Lew Fernandez, a director at PricewaterhouseCoopers LLP and a former IRS official.
For example, it remains "an open question" when latex gloves come under the tax, he said.
(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Tim Dobbyn)
Now who is this supposed to help? This is the kind of stupid crap I warned was coming. But everyone has insurance. Isn't it great, even though life-saving and quality-of-life improving devices are going to be more expensive?
I have had a form of medical device in me since I was 6 years old. Even worse are young kids, infants and toddlers, who need things like tubes in their ears.
But it doesn't just stop there. Any diabetic can tell you syringes, lancets, testing supplies, and so forth aren't cheap as it is. I have a glucose monitor and a PT/INR test kit. This only serves to hurt those who actually need good healthcare. Between this and taxing "Cadillac" plans I swear it is as if they don't actually want us to be able to get decent healthcare.
No new taxes my butt. That's all I see coming at me with this crap.
And yes, I'm actually upset right now. I'm upset at Obama for acting like this is a good thing, I'm upset at Nancy "we have to pass it so we can see what's in it" Pelosi, I'm upset at all the people that supported this and believed it could only be good without reading a single word of it, and I'm upset that it got rushed through without a serious debate.
I challenge anyone who thinks this plan is a good and honest plan for improving healthcare to explain to me why it involves taxing all the things we use to actually have good healthcare.
What's next? Taxing doctors? Higher taxes for successful treatments?
And before anyone mentions something about how it is just 2.3%, it is on even things like sutures and gloves. That means 2.3% on scalpels, plastic tubing, face masks, surgical scrubs, gauze, surgical bandages, etc. Anything that can't be made one time and sanitized repeatedly will be 2.3% more expensive. Your treatments won't just have a higher price if you get a hip replacement, but every treatment will cost more. You know that paper they roll out on the exam table? Taxed.
We are not talking about a few things here and there. We are talking about every exam, every procedure, every follow up. All of it will have a new tax.
We are screwed.
