While the bulk of the tax will be paid by larger companies in Massachusetts, many have argued that it will be even more burdensome for smaller companies. Many of these companies lack a diversified product line, and the tax will be levied regardless if a manufacturer or importer generates a profit.
Interestingly, repeal of the tax has attracted rare bipartisan support. Former U.S. Sen. Scott Brown supported its repeal and his opponent, recently sworn-in U.S. Sen. Elizabeth Warren, campaigned on its repeal.
The Republican candidates for the open Senate seat have all expressed concerns over the federal law as a whole, but none have directly addressed the medical device tax. By contrast, Congressmen Markey and Lynch are on record voting to keep the tax on the books, though they have recently softened their stances. It is an especially odd position for Markey, given his uncompromising support for the law, and how much time he has spent attacking Lynch for his earlier vote against the Senate version of the Affordable Care Act, before he voted for the final version.
According to ACA supporters, money raised by the tax will help to expand health care coverage. Surely this is true, but the other side of that coin is the potential lasting negative effects on the industry. Supporters have also argued that with more people covered by insurance, the medical device industry should expect a windfall of new users. Yet, the experience following the 2006 Massachusetts reform law does not support this view, as few companies saw an increase in sales due to the law.
We hope to hear more from Massachusetts Senate candidates regarding the trade-offs of the medical device tax and its impact on employment, future research and development funding, prices for end users and sending more private dollars out of state in the form of new taxes. After all, it is the future of your health care.
Josh Archambault is director of health care policy and Renee Laflam is a research intern at Pioneer Institute, a public policy think tank.