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The worst part of the House health care bill

November 12, 2009 - Mike Maneval

While the health care package passed by the U.S. House on Saturday covers a lot of ground, one item stands out.

One of the provisions of the House bill imposes a 2.5 percent tax on certain medical devices. The Fox affiliate in South Bend, Indiana fears this tax will have devastating impact on the orthopedic technologies sector, which accounts for about a third of the county's economic base.

Beyond its consequences for domestic manufacturing, the tax could well cover devices as varied - and essential - as heart defibrillators and tongue depressors. While some lobbyists are fighting to make the tax more complicated, distinguishing some devices from others and creating disparate rates, little of what the tax seems to intercept is "gold-plated," to borrow a term from past debate on taxation of insurance policies with allegedly excessive benefits.

Worse yet, the provision could well be on better ground to survive than any other measure, including the repeal of anti-trust exemptions I've praised here in the past. Reporter Janet Moore, of the Star Tribune in Minneapolis and St. Paul, notes the Senate Finance Committee, the next step for the package before it goes to the Senate floor, favored an even larger medical devices tax leading up to the House vote.


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