Medicare-Imaging Cuts

Company scraps plans for expansion over new ObamaCare equipment taxes

Obamacare will put new taxes on medical devices, which will stifle the production and development of current and future medical equipment.  The companies that make these devices will be hurt, and will pass the extra cost onto consumers.  Also, with a lower supply with increased demand, prices will greatly increase.

Physicians and facilities can save money on used and new medical equipment and office furnishings by shopping at MediBid’s Equipment Portal.  If you are looking for items to set up a new office or replace worn-out devices, perhaps a pulse oximeter or feeding pump, save money by buying your medical equipment directly from other physicians wanting to part with used or surplus supply. Doctors should check the “Wanteds” list before posting their items for sale.

Indiana company scraps plans for expansion over ObamaCare device tax

By Judson Berger     Published July 27, 2012

An Indiana-based medical equipment manufacturer says it’s scrapping plans to open five new plants in the coming years because of a looming tax tied to President Obama’s health care overhaul law.

Cook Medical claims the tax on medical devices, set to take effect next year, will cost the company roughly $20 million a year, cutting into money that would otherwise go toward expanding into new facilities over the next five years.

“This is the equivalent of about a plant a year that we’re not going to be able to build,” a company spokesman told

He said the original plan was to build factories in “hard-pressed” Midwestern communities, each employing up to 300 people. But those factories cost roughly the same amount as the projected cost of the new tax.

“In reality, we’re not looking at the U.S. to build factories anymore as long as this tax is in place. We can’t, to be competitive,” he said.

Company executive Pete Yonkman first revealed the scuttled plans in an interview with the Indianapolis Business Journal. The company later confirmed the decision to

The Affordable Care Act imposed a 2.3 percent tax on medical devices beginning in 2013. It is projected raise nearly $30 billion over the next decade.

But the Cook Medical spokesman said the impact is greater than just a 2.3 percent uptick in taxes. He said the impact on actual earnings is another 15 percent, and he projected the company’s total tax burden next year will rise to over 50 percent.

Republicans and medical device makers have been railing against the tax all along, with the GOP-controlled House approving a bill last month to repeal it. The Senate, though, hasn’t taken it up.

A recent study by the left-leaning Center on Budget and Policy Priorities, though, said the complaints by the industry are exaggerated.

“The tax will not cause manufacturers to shift production overseas.  The tax applies equally to imported and domestically produced devices, and devices produced in the United States for export are tax-exempt,” the study said. It also said repealing the tax would “undercut health reform” by requiring Congress to offset the repeal by potentially killing spending provisions in the law and by potentially encouraging similar repeals.

Cook Medical is part of a family of companies that produce medical devices for surgery, obstetrics, gynecology and other fields.


Leave a Reply


Be sure to include your first and last name.

If you don't have one, no problem! Just leave this blank.