Health care divide leaves tax on path to reinstatement

BOSTON (AP) — The industry that makes medical devices from artificial hips to miniature pumps for IV drips is looking for a fallback plan to repeal a widely reviled sales tax that almost met its end in GOP health care legislation.

The 2.3 percent excise, one of several taxes and fees in the Affordable Care Act that pay for expanded insurance coverage, has been the subject of ferocious lobbying by manufacturers seeking its permanent death. Yet for now it’s on track to be reinstated on Jan. 1 after a two-year hiatus, leaving industry leaders worried it will hurt employment and stifle development of innovative, even lifesaving products.

“We know it resulted in job loss when it was in effect and we also know it resulted in decreased investment and development,” said Patrick Hope, executive director of the Medical Imaging & Technology Alliance, one of several trade groups fighting reinstatement of the tax.

The tax covers a range of medical equipment sold to hospitals and physicians but excludes consumer items such as eyeglasses, hearing aids and diabetes kits.

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Various failed versions of Republican bills to repeal and replace the Obama health care law would have killed the tax that is also unpopular with many Democrats in Congress, some representing states with thriving clusters of medical device firms.

The U.S. medical device market was valued at nearly $148 billion in 2016 with projections it will increase to $173 billion by 2019, according to Emergo, a leading industry consultant.

Companies shed 29,000 jobs from 2013-2015 when the tax was in effect, according to government data cited by the Advanced Medical Technology Association, or AdvaMed. No corresponding employment data exists yet for 2016-2017 when the tax was suspended though another trade group, the Medical Device Manufacturers Association, said a member survey found 70 percent added jobs while R&D…

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