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James Dennin, Kapitall: We've heard politicians talking about the Medical Device tax – but what are hedge fund managers saying?
Even though the government shutdown is over, we're still not done hearing about Obamacare. The Affordable Care Act has been
plagued by disgruntled state legislatures, technology glitches on major websites, and political infighting about one of the most controversial parts of the bill: the medical devices tax.
[Read more on Obamacare from Kapitall: Hedge Funds are Buying 8 Healthcare Stocks Rallying off Obamacare]
The Medical Device Tax was originally
designed to provide roughly $40 billion dollars of Obamacare funding over the next few years.
But an extremely cohesive lobbying effort, and the scattered geographical distribution of the industry - which employs people in many conservative and liberal districts alike - cut that number in half before the law went into effect. This was also one of the signature demands of Republicans in their most recent effort to delay the bill.
With prominent Democrats such as
Evan Bayh (former Senator from Indiana) and
Joe Manchin (Senator from West Virginia), speaking out very publicly against the tax, and with renewed controversy swirling around the law yet again - the medical device tax could be a key area of compromise should the President actually be forced to make concessions.
In addition, with some parts of the law performing
poorly in certain, usually rural areas where there are fewer insurers, a lot of people who are more optimistic about the law are turning to
technology as a way to bring down the costs.
Maybe you have noticed your local doctor's office going
paperless. Meanwhile camp counselors and teacher's aides have been trained to administer adrenaline shots and automatic defibrillators – things that used to be done by doctors.
Regardless of whether the tax is repealed or not – medical devices and their industry have an important role to play in determining how the Affordable Care Act's rollout continues. It's also an important example of why America's healthcare system is so unique – the ingenuity produced by a healthy medical device sector is one of the major benefits of a private health industry.