A London-based medical firm has laid off about 100 of its employees and has blamed the action on Obamacare. Drain Toronto service providers reports on the developments resulting from the new health care laws.
Medical Device Levies
The medical technology firm let go staff at the Massachusetts and Tennessee offices in the U.S. The company said that the tax on medical devices, which is tied to the new rules, is the reason for the layoffs.
Smith & Nephew specified that the employees were in its advanced surgical machine unit.
The firm specializes in the development of orthopedic reconstruction supplies. It has almost 11,000 employees with operations in more than 90 countries, as it has stated in its website.
There is a 2.3% tax levied on medical products, which is forecasted to raise almost $30 billion in revenue over the next 10 years.
The company had released the intention last Thursday and said that the action was necessary to ensure that the costs related to with the medical devices are absorbed. The company said that for the absorption of this cost burden to take place, the less than one hundred positions had become redundant across their various division functions at the Massachusetts and Tennessee sites.
In November, Stryker, the medical products company announced that it intended to cut about 1,170 jobs. This reflected about 5% of the workforce it has worldwide as it anticipates the costs that are associated with the Affordable Care Act.
43,000 Jobs at risk
The tax on medical devices that is applied by the Affordable Care Act is estimated to cost about 43,000 jobs in the U.S. as the Advanced Medical Technology Association has reported.
The Obamacare proposals on health care takes aim at increasing the number of people who should be able to access medical services. The law seeks to introduce reforms including increasing pay for Medicaid doctors by 73%; explain plainly the insurance plan for the common person to understand; increase Medicare taxes, and open health exchanges for people to be able to compare health plans online and purchase them. The new laws will set the standard that all states will be required to follow. Many of the changes will start this year with others being effective in 2014. Hospital tax will increase for people earning by more than $200,000. The amount will be $250,000 for those filing jointly.
Drain services has found that critics of the expansion say that state rights of setting policies are at risk. The states will be required to cover additional costs for their residents.