Monday, March 29th, 2010

New Health Care Legislation’s Impact on the Plastics Industry

President's Post
Although SPI strongly agrees that the American healthcare system is in need of reform, we are extremely disappointed with the package passed by Congress and signed into law on Tuesday. Instead of addressing the issues that have resulted in the healthcare cost crisis — such as the lack of competition in many insurance markets, runaway litigation, or the inability of businesses to pool risk across state lines — we now face a law that places an undue burden squarely on the shoulders of the private sector employers that create and sustain America’s economic engine. As the third largest manufacturing sector in the U.S., the plastics industry impact will be far-reaching.

Through such provisions of the new law as the “pay or play” mandate, companies with 50 or more full-time employees will be forced to purchase federally-imposed levels of insurance coverage for their workers or face per-employee fines in the thousands of dollars. Smaller SPI member companies are not spared, as those who are incorporated as “Subchapter S-corps” may be subject to a new tax on their investment income. Plastic medical device manufacturers will now contend with a new excise tax on the sale of many of their products. Simply put, these new taxes and fees will inhibit a company’s ability to compete in the global marketplace, and will increase pressures on already-strained budgets and workforces.

Beyond these fees, plastics industry impacts are many. We do not yet know how insurance companies will respond to a 40% excise tax, or how states will pay for their increased Medicaid responsibilities; in all likelihood these costs will be passed on to our businesses, further hampering our ability to grow in this economic climate.

For our part, SPI vigorously lobbied against the most onerous aspects of this legislation, both directly and in coalitions with other like-minded stakeholders. Several grassroots mobilization alerts to our full membership resulted in members calling and sending letters to Congress, as well as raising their concerns in direct meetings with their elected officials. SPI continues its support of true reforms, laid out in a policy established by our member-driven process in early 2009.

I am proud of the way our member companies took up the fight in a coordinated effort to oppose this legislation and the fact that the manufacturing sector’s efforts succeeded in removing some particularly harmful provisions that were included in early drafts. Despite passage of this law, the national debate on health care reform will continue and SPI will remain active as it represents the interests of the plastics industry.

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