Donnelly’s Medical Device Tax Is Negatively Affecting Companies Throughout Indiana
When liberal Democrat Joe Donnelly voted for Barack Obama’s $1.76 trillion healthcare law, it hit medical device companies across the country with a 2.3 percent tax and today Ohio’s Dublin’s Cardinal Health – which is the largest medical device company in the country – has announced they might restructure their company due to this job-killing tax.
Cardinal Health joins other Indiana health care providers who are being forced into restructuring, cutting jobs or are no longer providing individual insurance coverage.
Indiana’s medical device industry is the fifth largest in the United States and, as George Will noted this weekend, Cook Medical based in Bloomington, Indiana, is not planning to open a U.S. factory a year. Zimmer, also based in Indiana, is laying off 450 and taking a $50 million charge against earnings.
Today the Columbus Dispatch reports:
Medical-device manufacturers and their advocates want to eliminate a 2.3 percent excise tax included in the federal health-care overhaul. Industry officials say the tax, which takes effect in January, would cost manufacturers about $20 billion during the next decade. The medical-device industry recorded about $136 billion in revenue in 2008. … Those who want the health-care law repealed by Congress said the tax could stunt medical innovation by leaving less money for research and development. … The tax would affect Dublin-based Cardinal Health’s $1 billion medical-kit business, said Michael Lynch, executive vice president. Cardinal’s earnings as a percentage of sales are in the low single digits, so the excise tax could cause the company to reconsider competing in certain business segments subject to the tax, he said. Cardinal Health employs about 4,400 people in Ohio. (Ben Sutherly, Medical-device makers fight tax, Columbus Dispatch, 05/15/12)
“Joe Donnelly owes the people of Indiana an explanation as to why he would support this massive government takeover of health care which is now costing hardworking Hoosiers their jobs,” said National Republican Senatorial Committee (NRSC) spokesman Lance Trover. “The people of Indiana deserve a senator who will stand up for their priorities and not simply rubber-stamp the Barack Obama agenda, as Joe Donnelly has done the past three years.”
BACKGROUND …
Donnelly’s Health Care Bill Is Hurting Businesses In Indiana
“Exodus” Of Insurance Companies Will Likely Result In “Fewer Choices And Higher Costs For Consumers.” “However, consumer advocates say the exodus of Aetna and other companies likely will result in fewer choices and higher costs for consumers under health insurance exchanges to be established in 2013 under the federal health care overhaul.” (“Aetna Latest Out Of Ind. Individual Market,” The Associated Press, 8/3/11)
Navistar International Corp. Has Decided To Relocate And Shut Down Its Fort Wayne Operations, Which Employs 1,400 People. “Navistar International Corp. is relocating, but that’s not a signal a slew of ‘For Sale’ signs will sprout across Fort Wayne, housing officials say. The maker of commercial and military trucks confirmed Wednesday it will cut ties to northeast Indiana by announcing it will consolidate some operations in Lisle, Ill., and the suburban Chicago area. The company’s Fort Wayne workforce includes 1,400, many of them engineers.” (Paul Wyche, “Realtors Doubt ‘Mass Exodus’ To Illinois,” The Journal Gazette, 9/9/10)
Aetna And Cigna Corp. Have Recently Withdrawn From The Individual Health Insurance Market In Indiana. “Hartford-based Aetna Inc. and Philadelphia-based Cigna Corp., which are the third- and fifth-largest health insurers respectively, have announced their departure from Indiana’s individual health insurance market.” (J.K. Wall, “Five Individual Insurers Leaving Indiana,” Indianapolis Business Journal, 8/8/11)
The Exit Of These Insurance Companies In Indiana Leaves Over 20,000 Hoosiers Without Health Care Coverage. “In addition, Illinois-based Pekin Insurance, Michigan-based American Community Mutual Insurance Co. and New York-based Guardian Life Insurance Co. of America also have decided to leave the individual market. The five companies covered more than 20,000 Hoosiers, or about 10 percent of all those who have individual health insurance.” (J.K. Wall, “Five Individual Insurers Leaving Indiana,” Indianapolis Business Journal, 8/8/11)
