Rising health care costs continue to burden manufacturing workers and American families. Unfortunately, three health care taxes are set to add even more costs to health care budgets across the country.
In 10 months, the medical device tax and the health insurance tax will go into effect. The Cadillac Tax, a 40 percent tax on “high-quality” employer-sponsored health plans, will come into full force in 2022. Regrettably, more and more employer-sponsored plans will be considered “high-quality” and taxed at the 40 percent rate because of the design of the tax, which will increase the financial burden on American families and manufacturing workers.
But it doesn’t have to be this way. Congress can act now to prevent these taxes from increasing health care costs—and manufacturers are urging it do so.
Companies are already facing hard decisions between setting aside funds to pay for the looming medical device tax bill or hiring potential new employees, investing in research and development or expanding operations. We already know the impact of the 2.3 percent excise tax on medical technologies because it went into effect for the two-year period of 2013 and 2014. During this time, tens of millions of dollars were diverted—either canceled or delayed—from innovative new research and almost 29,000 jobs were lost, according the U.S. Department of Commerce. Congress cannot allow this to happen again.
With the clock ticking on health care taxes, companies have already started preparing, and Congress must unite to address these health care taxes in advance of the looming deadlines. Today, a bipartisan group of 20 senators worked together to advance efforts to achieve full repeal of the medical device tax by introducing the Protect Medical Innovation Act of 2019. The National Association of Manufacturers key-voted similar legislation in the 115th Congress, which passed the U.S. House of Representatives with an overwhelming bipartisan vote of 283-132.
Manufacturers urge the House to introduce companion legislation and for Republicans and Democrats to expeditiously advance legislation to address the health care taxes that are fast approaching.