Dec 7, 2012 Comments Off Dinah Tellya
Excerpted from The Foundry: American health care consumers aren’t the only ones who will be hit by slated Obamacare tax hikes. Medical bills for their pets may go up as well.
According to a rule published Friday by the Internal Revenue Service, some medical devices used in veterinary practices will be hit by Obamacare’s 2.3 percent device tax. Many of their manufacturers are expected to hike prices, meaning higher veterinary costs for the nation’s pet owners.
The tax will not hit devices that are used exclusively for veterinary purposes. But a host of such devices are manufactured for use in both human health care and veterinary practices. Those devices’ manufacturers will have to pay the tax.
The IRS rule states:
Section 4191 [of the Internal Revenue Code] limits the definition of a taxable medical device to devices described in section 201(h) of the [Federal Food, Drug, and Cosmetic Act] that are intended for humans, but does not provide that the device must be intended exclusively for humans. Under existing [Food and Drug Administration] regulations, a device intended for use exclusively in veterinary medicine is not required to be listed as a device with the FDA, whereas a device intended for use in human medicine is required to be listed as a device with the FDA even if the device may also be used in veterinary medicine.
According to the FDA, common “dual use” medical devices are “examination gloves, sterile catheters, infusion pumps, etc.”
The device tax is expected to raise costs for consumers. A recent survey of 181 manufacturers found that a 52.5 percent majority plan to “pass along some or all of the increased cost [of the tax] to our consumers.” Among North American manufacturers, the portion who said they would raise prices was an even higher 58 percent.