Republicansenate.gov

Damage From Health Care Law

 Boeing, Goodrich, And Illinois Tool Works Join Companies That Project Major Losses As A Result Of The Newly Passed Health Care Law

“Boeing Says It Will Take A Charge Of $150 Million Due To The Recent Health Care Overhaul Legislation. The Aircraft Maker, Based In Chicago, Says The Charge Will Hurt Earnings By 20 Cents Per Share In The First Quarter Of 2010.” (“Boeing To Take Charge On Health Care Reform,” The Associated Press, 3/31/10)

“Goodrich Corp. Says It Expects To Incur A One-Time Charge Of $10 Million, Or 8 Cents Per Diluted Share, Against Its First-Quarter Results. The Company Cites The Recently Passed U.S. Health-Care Reform Legislation.” (“Goodrich Foresees $10M Charge From Health-Care Reform,” Charlotte Business Journal, 3/31/10)

•    “Charlotte-Based Goodrich (NYSE:GR) Is A Global Supplier Of Systems And Services To The Aerospace And Defense Industries.” (“Goodrich Foresees $10M Charge From Health-Care Reform,” Charlotte Business Journal, 3/31/10)

“Illinois Tool Works Inc. Lowered Its First Quarter And Yearly Earnings Forecast Tuesday Due To Costs Related To The Health Care Legislation Recently Passed By Congress. The Industrial Equipment Maker Said It Will Record A Tax Adjustment Of $22 Million, Or 4 Cents Per Share, To Reflect The Fact That Future Medicare Prescription Drug Subsidies Received By The Company For Retiree Prescription Drug Coverage Will Now Be Taxable.” (“Illinois Tool Works Lowers Outlook,” The Associated Press, 3/30/10)

PRUDENTIAL: HEALTH CARE LAW WILL COST THEM $100 MILLION

“Insurer Prudential Financial Inc. Said Monday That It Will Take A $100 Million Charge In The First Quarter In Relation To The Recent Health Care Overhaul Legislation. The life insurance and annuities provider said in a regulatory filing that it will take the charge against earnings in the first quarter.” (“Prudential To Take $100M Health Care Charge In 1Q,” The Associated Press, 3/30/10)

•    “Prudential Joins A Growing List Of Companies That Have Said They Will Take Accounting Charges Because Of The Health Care Bills. AT&T said last week it would take a $1 billion charge in the first quarter. AK Steel Corp., 3M Co., Caterpillar Inc., Deere & Co. and Valero Energy have also said they would take smaller charges.” (“Prudential To Take $100M Health Care Charge In 1Q,” The Associated Press, 3/30/10)

 VIRGINIA MEDICAL DEVICE DISTRIBUTOR EXPECTS HIGHER COSTS

“The Health-Care Reform Bill Signed By President Obama Last Week Brings With It New Excise Taxes On The Medical Device And Pharmaceutical Industries.” (“Health-Care Reform Brings New Taxes,” Richmond BizSense, 3/29/10)

•    “Wayne Sale, The Owner Of A Henrico-Based Medical Supply Distributor Health First Who Heads Up A National Trade Group That Opposes The Tax, Says He Expects Manufacturers To Pass The Cost To Him.” (“Health-Care Reform Brings New Taxes,” Richmond BizSense, 3/29/10)

•    SALE: “It Directly Affects Me Because My Manufacturers Have To Take It On To The Bottom Line … Now They Will Sell Me What They Sell For $25 For $28 To Make Up The Difference.” (“Health-Care Reform Brings New Taxes,” Richmond BizSense, 3/29/10)

   “LARGE TAX ON… LOWER AND MIDDLE CLASS WOMEN”

“Tucked Away In The Federal Health Care Reform Legislation Is What Many Say Is An Unfair Tax On Women. It’s Being Called The Tanning Tax, a 10 percent tax on tanning salon services that’s set to start in July. The government says the tax will generate $2.7 billion over 10 years.” (“Tanning Salons Upset Over 10 Percent Tax On Services,” WSAV NBC [Savannah, GA], 3/29/10)

•    “‘At First I Thought It Was A Joke, Because I Thought Surely They’re Not Going To Impose Such A Double Digit, Large Tax On… Lower And Middle Class Women,’ Said Shannah Lane, Owner Of Tan-Tastic Tanning.” (“Tanning Salons Upset Over 10 Percent Tax On Services,” WSAV NBC [Savannah, GA], 3/29/10)

“Owners Of Salons Such As Siren Tan In West Des Moines Said Are Not Happy About It. Congress will be collecting an extra 10 percent tax on indoor tanning starting July 1. The plan is to raise $2.7 billion during the next 10 years. In part, it will be used to pay for health risks blamed on too much tanning.” (“Tanning Tax Burns Salon Owners,” KCCI [Des Moines, IA], 3/29/10)

•    “‘I Think It's Sad The Government Comes In And Tells My Customers They Are Going To Be Charged More If They Chose To Look Good,’ Said Jody Wilson, Owner Of Siren Tan.” (“Tanning Tax Burns Salon Owners,” KCCI [Des Moines, IA], 3/29/10)

“Marcy DeVries Bought Grand Rapids' Westside Sun Spa A Few Months Ago, Which Finally Fulfilled Her Lifelong Dream Of Owning Her Own Salon.” (“10 Percent Tanning Tax To Start July 1,” WOOD-NBC [Grand Rapids, MI], 3/29/10)

•    DeVRIES: “We're Just Surviving Right Now … It's Going To Affect Us As Business Owners Because We'll Take The Hit Because We Have To Lower Our Prices Again To Keep Our Customers.” (“10 Percent Tanning Tax To Start July 1,” WOOD-NBC [Grand Rapids, MI], 3/29/10)

 MINNESOTA

“The Medical Device Excise Tax Aims To Raise $20 Billion Over Ten Years When It Goes Into Effect In 2013. It Will Apply To A Wide Range Of Medical Device Products--From Bed Pans To Stents Used For Propping Open Clogged Arteries.” (“Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)

•    “Minnesota Is Teeming With Companies That Make Those Products. Med Tech Giants Medtronic, Boston Scientific, St. Jude Medical, And Many Smaller Firms Have Operations In The State.” (“Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)

•    “’Minnesota Is Going To Take About 25 Percent Of The Hit On The Total Tax Levied Against The Medical Technology Industry,’ Said Don Gerhardt, The Chief Executive Of Lifescience Alley, A Minnesota-Based Trade Group Representing Several Industries, Including Medical Device Makers.” (“Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)

•    “‘I Think The Real Impact Is Going To Be On The Mid-Sized And Smaller Companies, Where Profit Margins Are A Lot More Narrow, and in some cases are so narrow that the effect of the tax will push a small minority of the companies from black to red,’ Perriello said.” (“Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)

 MASSACHUSETTS

“In Massachusetts, One Of The Industries Touted As A Job Creator For The Future Has Been The Manufacturing Of Medical Devices.” (“Government, Industry, Bracing For Impact Of Health Reform,” The Eagle Tribune [Lawrence, MA], 3/28/10)

•    “But The Health Care Reform Law Contains A Hefty New Tax On These Products, Putting The Long-Term Prospects For Some Of These Companies In Doubt.” (“Government, Industry, Bracing For Impact Of Health Reform,” The Eagle Tribune [Lawrence, MA], 3/28/10)

•    “The 225 Medical Device Manufacturers In Massachusetts Employ 21,000 People And Generate $6 Billion In Annual Sales. Their products include such items as pacemakers, defibrillators and the tools for minimally invasive joint surgery produced by Smith & Nephew Endoscopy of Andover.” (“Government, Industry, Bracing For Impact Of Health Reform,” The Eagle Tribune [Lawrence, MA], 3/28/10)

•    “That The Tax Is On Sales, Not Profits, Is Significant. The Tax Will Drive Marginally Profitable Companies Into The Red And Extend Losses For Those Already Losing Money.” (“Government, Industry, Bracing For Impact Of Health Reform,” The Eagle Tribune [Lawrence, MA], 3/28/10)

 INDIANA

INDIANAPOLIS STAR: “The Legislation, In Fact, Is Likely To Accelerate Price Increases In Some Areas Of Health Care. For Instance, A Tax Increase On Medical Device Companies Is Sure To Be Passed On To Consumers And Their Insurers.” (Editorial, “Vote Is Done But Debate Continues,” Indianapolis Star, 3/23/10)