Oct 19, 2009 6:22 pm US/Central
Minn. Leaders Wary Of Proposed Medical Device Tax
(WCCO)
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Aaron Holm, a double amputee, says his two prosthetic limbs are highly-developed devices created in Minnesota.
CBS
Minnesota's medical device industry is raising the alarm about a new health care tax it says will cripple the state's 'Medical Alley,' making it harder for consumers to buy life-saving products.
Medical device manufacturers made their case at a Congressional hearing in Plymouth, opposing a national sales tax on common medical devices like pacemakers and prosthetic limbs.
They argue the tax will hit hardest in places like Minnesota, where the medical device industry is booming.
Aaron Holm, a double amputee, says his two prosthetic limbs are highly-developed devices created in Minnesota. He says a sales tax on prosthetics could make the $35,000 cost for a single leg unaffordable for more amputees.
"A lot of insurance companies think of it as more of an experimental device, and aren't covering it at this time," said Holm. "So for individuals that are paying out-of-pocket, the tax would just increase the burden."
Holm lost both legs in a highway accident two years ago while trying to help a motorist change a tire.
Congress is considering a sales tax on medical devices like prosthetics, but also pacemakers and portable defibrillators to help pay for health care reform.
Minnesota 5th district's Rep. Erik Paulsen says the tax will cripple Minnesota's medical device industry.
"To me, this tax really amounts to a tax on the tools of modern medicine," said Paulsen. "It's also symptomatic of a mentality in Washington that really needs to be fundamentally changed."
Medical device manufacturers say Minnesota's "Medical Alley" now hosts 200 companies employing more than 20,000 people.
They said a sales tax on medical devices could mean deep layoffs.
"The federal government can't look at the medical device industry as a bank to rob in order to pay for their health care reform," said Howard Root, the President and CEO of Vascular Solutions, "without seriously damaging our industry and innovation."
Supporters of medical device tax say those companies have made hundreds of millions of dollars in profits in the past, and they stand to benefit greatly from health care reform.
That is simply because millions more people will be required to carry insurance, which could help more people buy medical device products.
Holm says his two Minnesota-designed prosthetic legs must be replaced every three to five years. But he says a device tax could slow research and make his leg harder to get.
"I realize every day as I age, I get older, I need the products to get better," he said.
Politically, this is one of the very few instances in the health care debate where Minnesota Republicans and Democrats are on the same page. Democratic Senators Amy Klobuchar and Al Franken are joining with Paulsen and Governor Tim Pawlenty to lobby against the medical device tax.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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