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Medical device tax hurts both patients and providers–and has big impact in Minnesota

ObamaCare created an arbitrary 2.3% excise tax on medical device manufacturers that could have a devastating impact on the jobs of over 26,000 people in our state who work for medical device companies. The healthcare legislation will fall heavily on smaller, start-up companies as well large innovative businesses that are essential to revitalizing our economy and creating new jobs.

This policy essentially taxes innovation, a classic example of government interfering with free markets, thereby diminishing the ability of private sector companies to generate new products, economic output and jobs. Here is an article from Ray Elliot, the CEO of Boston Scientific Corp.

By taxing the sales revenue – not the net profits – of medical device manufacturing companies, the medical device tax will extract $20 billion from this industry, in some cases costing companies more than they generate from their operations. This could cripple investment in research, product development and facility expansion, curtailing job growth and stifling medical invention.

Medical device products are essential to the health care of countless patients and medical device companies are essential to providing good jobs in Minnesota. We applaud Rep. Erik Paulsen (R-Third Congressional District) for leading the fight to repeal this job-killing, counterproductive tax as quickly as possible.

HHS Omnibus Omits Health Insurance Exchange After All

After I made my commentary on the HHS omnibus bill, at least one significant change came about–the elimination of language dealing with insurance exchanges. This is a big deal.

Lines 258.29-259.34, 259.1 and 259.2 of this version of the bill (which all run together) appropriated money for a “streamlined eligibility determination” system for state health care programs. The system will “enhance customer service for applicants and enrollees; incorporate eligibility changes in a timely manner; promote ongoing program integrity; and integrate Minnesota health care programs into the health insurance exchange authorized under Minnesota Statutes, chapter 62V.” (emphasis added)

Yet if you go now to the House list of bills for the special session, click through to the omnibus bill, you’ll find an updated URL. More importantly, look for the same lines, and you will similar language, with one significant omission: There’s no mention of a health insurance exchange.

This is a significant development.

Credit for this correction–and quite possibly the striking of the exchange language–goes to Twila Brase of the Citizens’ Council for Health Freedom. She said the following in a Facebook post:

Pays to “TRUST BUT VERIFY.” Late last night I found the Obamacare “health insurance exchange” language in the MN special session HHS bill (HF 24). Leadership scrambled after I notified key legislators. They delayed vote and introduced a whole new bill (HF 25). No one seems to know how the language got in there, but it’s gone now. This is why an hour from posting to passage is never a good idea.

Health and Human Services–Introductory Comments

The Health and Human Services bill for the special session is now up.

It’s a long, complicated beast, as you might expect; the official summary alone is 32 pages–and that’s just a draft summary.

There’s an amazing amount of  stuff in here. It covers everything from subsidies for day care to regulations of podiatrists to paying out money in health care welfare. The numbers in parentheses (3.26, for example) represent the line in the bill in which the provision first appears. Usually it extends for several lines. One point that I should make at the outset is that there appears to be plenty of “policy” decisions included in this bill. What counts as a policy issue, and thus supposed to be pulled from the omnibus bill this time around? I’m not sure.

The day care section (3.26) is designed to make sure that subsidies don’t go to a parent for providing day care services for his or her own children (unless the parent provides day care for many more children as well). It’s a great example of how public policy can get contorted: “We” (as in, legislatures past and present) want to subsidize day care services, but are also concerned that the children don’t get the undivided attention of their parents. I suppose you could say that’s what the EITC is for, as well as tax credits for children.

More daycare providers will be required to take lessons in CPR (5.3). Knowing CPR is a good idea, but should it be mandated by law? I see more paperwork burdens and potentials for bureaucratic snafus (think of the ongoing “beer crisis” involving brand licensing and buyer’s cards if you want an illustration).

Daycare providers come under increased regulatory pressure in another way: the subsidy rate given to “legal nonlicensed family child care providers” is reduced from 80 percent of the county maximum rate to 68 percent. I’m not entirely sure what this means, but it looks like it’s an incentive for nonlicensed providers to get a license. The bill also reduces the number of days off (not including holidays) that state will pay for from 25 to 10. I believe “absent days,” as these are called, are days in which the child does not show up to day care rather than days that the day care provider does not work.

The bill attempts (8.20) to limit what welfare recipients do with cash payments. It says that some payments must be provided in the form of EBT cards, which have words to the effect that it can’t be used for alcohol or tobacco.

Emergency financial assistance is available to some people with incomes up to two times the federal poverty level (11.31)

When counties contract with residential facilities for some forms of assistance, they must do so only with facilities that “encourage a policy of sobriety on their premises.” (14.22)

People who qualify for MFIP (welfare) may have a car that’s worth no more than $10,000. It used to be $15,000 (14.31).

MFIP has a work requirement. People who get MFIP money cannot satisfy that work requirement by working on political campaigns (17.29).

On health care, the biggest issue may be the section that authorizes the executive branch to submit a waiver request to the U.S. Department of Health and Human Services (217.26).  Waivers are where the action is in health care policy. Depending on the content of the waiver–and of course whether the feds agree–this could be the most beneficial part of the bill.

The bill also imposes yet another payment reduction on health care providers (222.3) for the services they give to people in government programs, which will arguably promote cost-shifting to the private sector (yet again).

Jump ahead to the hot-button issue of whether Minnesota should set up an insurance exchange, I notice (259.1) that $2.5 million is allocated for various purposes, including a “streamlined eligibility determination” system for state health care programs. The system will, among other things, “integrate Minnesota health care programs into the health insurance exchange authorized  under Minnesota Statutes, chapter 62V.”

Consider that the last line in the file is 286.3, and you have an idea of the length of the bill. As I said, even the research summary was in draft form; many sections of the bill were simply not summarized.

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