WASHINGTON, D.C. - Montana's Congressman, Denny Rehberg, today joined a bipartisan majority of the U.S. House in voting for the Protect Medical Innovation Act, which he has also co-sponsored.  This legislation eliminates the 2.3 percent medical device excise tax that was established in President Obama’s health care law.  This excise tax on medical devices will go into effect in 2013 and will cost medical manufacturers, providers and recipients at least $29 billion in the first ten years.
 
“For a bill with ‘affordable’ in the title, a lot of us are scratching our heads wondering how raising taxes on health care equipment does anything but make it more expensive and harder to access,” said Rehberg.  “But far worse than directly increasing the cost of health care, this tax actually threatens medical innovations that could save countless lives.  And it threatens jobs, with 81 percent of medical device manufacturers classified as small businesses.  A growing number of lawmakers from both parties are recognizing just how bad Obama’s health care law really is.”
 
The medical device tax is a 2.3 percent excise tax on US-made and imported medical devices.  Medical devices include things like CT scanners, wheelchairs, pacemakers and blood pressure cuffs.  These devices save countless lives around the world, and new devices currently being researched and developed have the potential to save countless more.
 
Medical devices are primarily developed and manufactured by small businesses, which are the job-creation engine of the American economy.  In fact, 81 percent of medical device manufacturers are classified as small businesses.  Small businesses operate on narrow profit margins, and because the excise tax is on the total sale cost, not just the profit, many will end up owing more in taxes than they make in profit.
 
To absorb the cost, manufacturers will have to cut operations, research and development, and jobs.  This, as a result, would harm future innovation and development that ultimately means patient care and US competitiveness suffers.
 
The medical device tax is just one of many harmful taxes, penalties and fees in President Obama’s health care reform law.  Rehberg has voted for a full repeal.  As Chairman of the House Appropriations Committee that oversees health care spending, he also successfully passed legislation in the House to de-fund implementation of the law.
 
“I want to thank Denny for his support of the Protect Medical Innovation Act, which will eliminate a new excise tax that will have a detrimental effect on medical innovation,” said Torger Sikveland with The Comfort Company in Bozeman.  “This tax creates a perfect storm that could force many medical equipment providers to close their doors and leave their customers without access to the services they desperately need.  That’s an outcome that no one wants, and Denny’s leadership in supporting this legislation shows he understands health care.  This is an important step to preventing it from happening.”