Senate Democrats: Um, Let's "Postpone" Obamacare's Medical Device Tax

Posted: Dec 11, 2012 4:36 PM

What a pity.  If only someone had demonstrated the foresight to warn against the destructive consequences of Obamacare's medical device tax, they might have helped turn public sentiment sharply against the law prior to passage.  Oh, that's right, conservatives did -- and the American people rose up in opposition.  Now, the very actors who are most responsible for ignoring public demands and jamming through Obamacare are trying to "delay" or repeal a major element of their law, warning that it could stifle medical innovation and kill jobs.  Welcome to the party, guys.  You're about two years too late:

U.S. Sen. Bob Casey and 16 other Senate Democrats want the medical device tax - included in the 2010 healthcare reform law that they supported - postponed. The 2.3 percent excise tax that devicemakers must pay on their gross sales goes into effect on Jan. 1. It's one of the new revenues used to offset the cost of the healthcare law. The Internal Revenue Service issued Wednesday its final rules on the tax, which will impact profits on items such as high-tech burn treatments, catheters, back braces and in-home HIV tests. Casey signed a letter to Senate Majority Leader Harry Reid this week asking that he support delaying implementation of the tax. Casey supports fully repealing it. "With this year quickly drawing to a close, the medical device industry has received little guidance about how to comply with the tax—causing significant uncertainty and confusion for businesses," the senators wrote.

The Minneapolis Star-Tribune reports that both of Minnesota's Democrat Senators are scrambling to mitigate the damage caused by the law...for which they both cast decisive votes -- a small detail that didn't make it into the story:

Democratic Senators Amy Klobuchar and Al Franken pointed to thousands of high-paying jobs that device companies support in Minnesota, headquarters to such giant devicemakers as Medtronic and St. Jude Medical. The industry has painted the tax as a job killer that would hurt innovation. "The delay would give us the opportunity to repeal or reduce that tax," said Klobuchar, co-author of a letter sent to Senate Majority Leader Harry Reid seeking the delay. Repeal is the ultimate goal of the letter's 18 signers, including Klobuchar, Franken and all the heavy hitters in the Senate Democratic leadership. But politically that would be virtually impossible before Jan. 1, said Norman Ornstein, a congressional expert with the American Enterprise Institute.  

Here's a minor fact that did manage to sneak into the article's 14th paragraph: "The House has already voted to kill the tax, approving a bill offered by Minnesota Republican Rep. Erik Paulsen."  Low information voters may ask themselves why anyone would have gone along with such a dreadful idea in the first place.  The answer is simple.  Fake math.  Democrats needed to inject as much "revenue" -- real and phony -- into the bill in order to manufacture a bogus CBO score on the legislation's final price tag.  The more revenues were stuffed into the law, the less it would technically "cost," providing just enough fleeting political cover to cobble together the requisite number of votes. Every liberal on television in the days preceding the final House vote highlighted the bill's absurd price tag of $941 Billion, citing "the non-partisan Congressional Budget Office" as gospel. They failed to mention that Congress had deliberately employed insane gimmicks and costly tax increases to gerry-jig that score, and that the real figures would be much, much higher.  This cynical ploy has led cary-carrying Obamacare supporters in Congress and the White House to repeal and dismantle several pieces of the law, even before the bulk of implementation.  The medical device tax is merely the latest installment in a series of "nevermind" moments -- and it almost certainly won't be the last, as brand new disasters are brewing.  And while we're on the subject of Obamacare, Mary Katharine Ham mines a nasty little nugget embedded in the avalanche of newly-released regulations pertaining to the law (via the Associated Press):

Your medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Obama’s health care overhaul. The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers. Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers. “Especially at a time when we are facing economic uncertainty, [companies will] be hit with a multimillion-dollar assessment without getting anything back for it,” said Mr. Sheaks, a principal at Buck Consultants, a Xerox subsidiary. Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

Not to worry, we're told, this tax is only "temporary," and will be reduced over time.  MKH snarks:

The fee starts at $63 in 2014 and it gets lower every year until it’s phased out in 2017 because, obviously, people with pre-existing conditions will stop costing more money after that.  

Premiums are going up, and $63 is going to look like a walk in the park before all is said and done.  This is a flagrant violation of Obama's magical "premiums will go down by $2,500!" pledge, but apparently nothing that the man says actually matters once those words become inconvenient to his latest government expansion project.  And guess who's going to get slammed the hardest by the premium hikes?  Young people, the demographic that is most supportive of the law.  Way to go, guys.

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