Governors oppose $40B medical-device tax

Gov. Gary Herbert is one of five GOP governors who signed a letter protesting a $40 billion tax on medical devices included in the Senate health-care-reform bill.

The letter to Senate Finance Committee Chairman Max Baucus, a Democrat from Montana, warns the tax could actually increase health-care costs, as well as eliminate jobs in the industry.

"We are very concerned about the impact of an excise tax on the industry, employees, health-care providers and patients that rely on these innovations in our states," the two-page letter dated Tuesday read.

In addition to Herbert, the other governors signing the letter were California Gov. Arnold Schwarzenegger, Nevada Gov. Jim Gibbons, Minnesota Gov. Tim Pawlenty and Indiana Gov. Mitch Daniels.

In 2006, according to the letter, some 360,000 people nationwide were employed by the medical-devices industry, described by the governors as "a key constituency in our states" and "an integral part of our respective economies."

Utah is home to dozens of such companies, including Merit Medical Systems, headed by former Republican candidate for governor Fred Lampropoulos, which manufactures devices used to treat heart disease.

The proposed tax, the governors wrote, could affect as many as 80,000 products, including toothbrushes and eyeglasses, as well as artificial heart valves and other advanced equipment.

The U.S. medical-device industry is already helping to keep health-care prices low, the governors said. Adding the tax could increase health-care costs, they said, noting the U.S. would become "the highest tax jurisdiction in the world in which to produce medical technology."

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