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View Diary: Updated: Leave the Medical Device Tax Alone (15 comments)

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  •  So we're supposed to use less medical devices? (0+ / 0-)

    Is this tax like the cigarette tax, that's supposed to raise money and get people to quit smoking?  Are medical devices bad for us and we're supposed to cut back?  Maybe go cold turkey?

    Silly me, I thought medical devices were for valid medical reasons - you know - healthcare.  So we raise money to pay for healthcare by taxing healthcare?

    Does that mean subsidies have to be 2.3% higher to cover the tax that funds the subsidy, that funds the tax, that funds the subsidy, that funds the tax....

    This isn't a tax to change behavior, or to punish bad behavior.  It's a tax that claims to make healthcare cheaper, by making it more expensive.

    J&J will be just fine, they'll raise their prices by 5%.

    •  Sorry, but that's just lazy thinking (1+ / 0-)
      Recommended by:

      Not all taxes are designed to change behaviors--some, like this one, are introduced to offset other costs by taxing industries which will benefit from the policy (with the policy benefit outweighing the increase in the tax).  From the CPBB:

      Congress carefully designed the ACA so that it will not add to the budget deficit.  To help pay for the expansion of health coverage to 27 million uninsured Americans, the ACA either reduces Medicare payments or increases taxes for a wide range of industries that will benefit from health reform, including hospitals, home health agencies, clinical laboratories, health insurance providers, drug companies, and manufacturers of medical devices.

      To be free and just depends on us. Victor Hugo.

      by dizzydean on Mon Oct 14, 2013 at 12:13:00 PM PDT

      [ Parent ]

      •  The customers pay that tax! (0+ / 0-)

        Let me explain it to you carefully.  When a tax is placed on an industry, the industry add that tax to the cost of doing business.  When the industry sets prices to cover costs and leave a profit, they factor in ALL costs, including taxes.

        Like I said, the industry will raise prices 5% to cover a 2.3% tax.  Healthcare costs to the newly ensured will rise by more than their subsidies.  The CEO makes more money, the customer has less in his pocket.

        No, sorry, but the lazy thinking is robbing Peter to pay Paul.  Of course the medical supply industry will benefit from health reform - more people will be getting access to health care.  How did you think that was going to work?  You thought more doctor's visits meant FEWER rubber gloves being used?  You thought those gloves would be free?

        The gov't will never see a dime of that $27 Billion.  It will be gone in higher prices.  ACA premiums will rise to compensate.

        Tell me, if a renewable energy push required more wind turbines, and since that would benefit the wind industry, should the wind industry get a tax increase?
        Would you believe a person who told you your electric bill would be cheaper if wind companies were taxed more?

        •  I diagree. Read the CPBB report I linked to above (0+ / 0-)

          Especially the section labelled "Tax Will Have Minimal Effect on Consumers".  

          To be free and just depends on us. Victor Hugo.

          by dizzydean on Mon Oct 14, 2013 at 02:10:09 PM PDT

          [ Parent ]

          •  I agree, it will be "minimal" effect (0+ / 0-)

            I'm sure they define a 3-5% cost increase as "minimal". The question remains though:  what's the point?  You're still making care more expensive for everyone.

            •  Again, read what they say--from what you say (0+ / 0-)

              you have not.  Here, I'll cut and paste it for you:

              The effect of the excise tax on consumers’ costs for health care and health insurance will be minimal and will be swamped by other factors.  Spending on taxable medical devices represents less than 1 percent of total personal health expenditures, so a small increase in their price would have an almost imperceptible effect on health insurance premiums.

              Device manufacturers generally do not hold enough market power to pass on the entire excise tax to consumers through higher prices.  For some common medical devices (for example, heart valves and hip and knee replacement parts), buyers have several available alternatives and can negotiate for a favorable price.  For other products, manufacturers may not be able to pass on the full tax to consumers because treatment of the health condition is elective or physicians can select other treatment options.[24]>

              To be free and just depends on us. Victor Hugo.

              by dizzydean on Mon Oct 14, 2013 at 02:59:43 PM PDT

              [ Parent ]

              •  How does less than 1% fund anything? (0+ / 0-)

                You don't see the logic of that?

                I'll take you at your word, that the medical device tax is less than 1% of all health care spending.  So how does that fund healthcare?

                My point still stands that the tax will only make care more expensive.  Maybe not by much, but costs won't go down - which is the real goal.

                So less than 1% of costs is scraped together and used for subsidies?  It won't cover much.

                You said the tax would raise $26 Billion over ten years, so $2.6 Billion per year.

                Total US spending on healthcare is currently about $2.5 Trillion.  $2.6 Billion is 0.1% of that.

                The tax does absolutely nothing, it isn't worth arguing over.  Let the GOP have it as their "win" and move on.

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