Republican victories in last week's elections have raised hopes in the medical device industry that a planned $20 billion tax on its products might be open to discussion.
When the tax was proposed as a way to help pay for health care reform -- with an initial pricetag at $40 billion over 10 years -- the industry was strongly against it. A bipartisan coalition from Minnesota's congressional delegation banded together in fierce opposition.
Ultimately, the amount was cut in half after intense lobbying on industry's part. Now, the new reform law stipulates that med-tech firms will be assessed a 2.3 percent excise tax on sales of their products. That is expected to raise about $20 billion over a decade.
Representatives from Minnesota's med-tech community didn't like it, but they gritted their teeth and accepted it as a fait accompli.
But last week, when Republicans wrested control of the U.S. House and won more seats in the Senate, rumors began to circulate that the health care reform law might implode. While many Capitol observers don't expect that to happen, there is still some hope that the dreaded med-tech tax may be in play again.
Steve Ubl, a Minnesota native who heads the Washington-based industry organization AdvaMed, is circumspect when asked whether the tax could be repealed or further pared back.
"We continue to believe the tax is regrettable, and we've said all along we'll look for every opportunity to mitigate it," Ubl said.
Minnesota is home to about 200 med-tech firms, including the world's largest, Fridley-based Medtronic Inc. The state is also second in the nation in med-tech jobs, employing 27,000 in the industry.
Sen. Amy Klobuchar, D-Minn., who opposed the tax, said in a statement, "I understand that parts of the health-care law are not perfect and there are certain areas that can be improved," she said, noting the med-tech tax is one of them. "I will continue to work to change parts of the law to help our state and also ensure that we continue to delivery high-quality health care."
Likewise, a spokesman for Rep. Erik Paulsen, whose suburban district west of the Twin Cities is home to several med-tech firms, noted the tax isn't slated to begin until 2013, "so we have a little time to work on it." The Third District Republican serves as co-chair of the Medical Technology Caucus in Congress.
Janet Moore • 612-673-7752
