A new survey shows more than half of device makers expect to cut back on jobs to deal with excise tax.
A new survey shows that more than half of medical device manufacturers expect to lay off workers this year, in order to deal with the 2.3% excise tax on medical devices, implemented Jan. 1.
AdvaMed surveyed more than 80 companies of varying sizes, concluding that 62% of companies predict layoffs or reduced hiring. More than 80% of companies with $5 million to $50 million in revenue say the plan to downsize.
The respondents also say the cost to the industry because of the tax will be between $400 million and $667 million.
Many in the medical device industry, including AdvaMed, have spent months trying to delay the tax, which will help offset some of the costs of the Affordable Care Act.
President Barack Obama recently told a Minnesota news station that the new health care bill will bring in 30 million new customers for businesses.
“It’s going to be great for business, and they’re doing really well right now,” he said. “This additional tax essentially comes back to them as new customers.”