The top 19 public and private medical device makers in Massachusetts are projected to pay nearly $422.3 million in compliance with the new medtech tax, according to a Pioneer Institute analysis.
MASSDEVICE ON CALL — The 2.3% medical device tax created by President Barack Obama's Affordable Care Act is projected to raise more than $422 million this year from the top 19 public and private medical device makers in Massachusetts alone, according to a new analysis by the Bay State's Pioneer Institute.
The funds are intended to help expand health insurance access for many Americans, but there are trade-offs, the analysts warned. Potential down-sides include lost jobs, chopped research & development budgets and more state dollars funneled to Washington D.C.
"While some will gain insurance coverage, the individuals and industries taxed will make adjustments to their behavior or mode of conducting business," according to the report. "Undeniably, the medical device tax will impact the industry locally for the foreseeable future. Policymakers have to ask themselves if the potential benefits are worth the downside risks of employment loss, declines to future funding for research and development, higher prices for end users, and more private dollars being sent out-of-state in the form of new taxes."
The report further projected the individual impact on the 19 largest Massachusetts medical device makers, finding that the companies will owe an average of about 1.5% of their total revenues in order to comply with the sales tax on applicable medical devices, based on revenue figures from 2011.
Estimates for the top 5 Massachusetts companies are as follows:
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