Sales of medical devices have jumped since a controversial tax was put in place to help pay for Obamacare, a federal watchdog found, but the finding comes with some key caveats.
Net sales of medical devices, which include products ranging from surgical gloves to pacemakers, increased from about $95 billion in 2005 to $136 billion in 2014, a 43 percent increase over the period, according to a report from the Government Accountability Office.
The data was in response to a request from Senate Minority Leader Harry Reid, D-Nev., who wanted to know the impact of a 2.3 percent tax on medical device sales that went into effect in 2012. The tax is expected to raise about $20 billion in revenue through 2019 to help pay for Obamacare.
Obamacare supporters have noted that the law will expand insurance coverage, which will result in more device sales, so companies can recoup their losses.
But the tax has been a perennial target for the law's opponents, who worry it is killing jobs and innovation.
The latest bill to repeal the tax garnered bipartisan support in areas with big medical device industries. It passed the House last month and now moves to the Senate, but President Obama has threatened to veto it.
There are some caveats to the agency's report. The analysis doesn't conclude that Obamacare caused the higher medical device sales. In addition, sales vary based on the type of company. Of the 102 companies examined, 30 were large companies, 35 were medium-sized and 37 were small companies.
The 30 large companies represented at least 95 percent of the total net sales in each year, while medium companies garnered 4 percent and small companies only 1 percent, the GAO said.
Trade groups representing the device companies told the GAO that Obamacare's coverage expansions likely won't have a big impact on sales. The reason is the people who benefit from the expansions "mainly consists of infrequent users of medical devices," the report said.
The Thursday report is the latest to examine the impact of the tax and Obamacare on the device industry.
In January, the independent Congressional Research Service examined whether the tax is hurting the industry. It found that most of the tax will "fall on consumer prices, and not on profits of medical device companies."
The report found that the tax would have "fairly minor effects" on the device industry and on jobs. That is because the tax rate is small and there is an exemption for various devices, such as contact lenses.
However, the report did note that the tax was odd. An excise tax is put in place to stop a certain activity, such as tobacco taxes, or fund a specific government activity such as using the gasoline tax to finance highway construction.
"These justifications do not apply, other than weakly, to the medical device case," the report said.