A Call to Action
Distributors can help modify the new medical device excise tax
By Gary W. Price, CEO, of Dental Trade Alliance
In the early stages of debate over healthcare reform, Congress considered including dental care for all citizens. Like other expanded health benefits, along with the coverage came a tax provision to pay for the additional care that would be provided. As the legislation made its way through the political process, universal coverage for dental care was dropped – primarily because of a lack of funds. The tax or funding mechanism was not dropped.
The new law creates a new excise tax on the manufacture and sale of most professional dental products that would far exceed any additional revenue or profit generated by provisions in the law to increase access to dental care. Our estimate is that the tax would be up to 70 times the potential benefit to the industry. The law contains provisions for a tax of 2.3 percent on the sale of Class I, II, and III dental devices (the vast majority of dental products sold) by the manufacturer, producer, or importer. The tax applies to the price for which the device is sold by the manufacturer, producer or importer.
Although some or all of this tax may be passed through to the consumer, the DTA feels that it is important to oppose the tax because 1) the potential to expand the use of the taxing mechanism in the future is likely (including increasing the tax rate), 2) any increase in the cost of dental care may negatively influence patient decisions to seek oral healthcare services, and 3) the tax is disproportionate to any increase in revenue by the industry and thus would cause the dental industry to subsidize markets for devices serving the medical market.
The DTA will seek relief from the tax by appealing to Congress to modify the law. The preference would be elimination of the tax, but we recognize that modification of the tax may be the practical goal.
We are calling on DTA members to actively participate in this appeal to Congress by writing letters, making phone calls and visiting with your elected representatives. The committee asks all DTA members to participate but will concentrate special efforts on DTA members who have operations or live in states or congressional districts where representatives have seats on key health decision committees. We have provided sample letters on our website www.dentaltradealliance.org. Also provided is a discussion paper with more information about our efforts.
We hope that everyone in the dental industry will take time to write to our elected representatives. We believe that if we all work together we can have a positive impact by reducing or eliminating the burden of this new tax on our industry.
|
|
|
