US Senate healthcare bill would tax cosmetic surgery

Nov. 24, 2009 - PRLog -- Cosmetic surgery and procedure patients and health-care providers are lining up in opposition to a provision in the U.S. Senate’s version of Health Care Reform which would impose a 5% tax on purely cosmetic  elective procedures, a measure designed to raise nearly $6 billion of the projected $849 billion cost of the healthcare bill.

Having been tagged the “Botax” by observers -- a take-off on popular Botox injections for wrinkle relief and a procedure presumably subject to the proposed new tax -- the new cosmetic procedure tax is being championed as simply a tax on the wealthy who can afford it. But according to organizations representing the plastic and cosmetic surgery industry, such a tax would in fact target the middle class and working women in particular.

Jeffrey Raval, Md, FACS, a Denver facial plastic surgeon who operates Raval Facial Aesthetics, P.C., and Rocky Mountain Laser Aesthetics, P.C., calls the tax unfair and a burden on the middle class, especially women. Dr. Raval said he treats women and men from all economic levels at his Cherry Creek North offices.

The United States Senate cleared an important hurdle in Health Reform legislation Saturday night with a 60-40 vote, reflecting strictly partisan support, which will bring the Democratic leadership’s massive 2,074-page bill to the full Senate for debate as early as next week. Passage of the bill remains uncertain, as members of the more moderate wing of the Democratic Party are not in lock-step with the full caucus on many of the legislation’s provisions, and joining with the body’s 40 Republication members in opposition may leave the bill subject to a filibuster and bar a final up-or-down vote.

A report from the American Society of Plastic Surgeons (ASPS) cited many problems with the Botax provision, chief among them a 2005 survey conducted by the group indicating that only 10% of people considering cosmetic surgery over the next two years had a household income greater than $90,000 per year, a clear indication that such procedures go well beyond the privileged few.  Moreover, the association said that 86% of cosmetic surgery patients are women, with the bulk of them working women between the ages of 19 and 64.

When the idea of a “luxury” tax on cosmetic procedures was first raised last summer, the White House was reportedly backing a provision that would have made the cosmetic procedure tax even higher: 10%. But when Senate Majority Leader Harry Reid, D-Nev., last week introduced the bill that will debated in the Senate, the tax rate was dropped to 5%. If the bill passes, the cosmetic plastic surgery tax could begin to be collected as early as January 2010.

Another potential problem in the bill, observers say, is the definition of “cosmetic” as it relates to the tax. Sen. Reid said he took the language for the provision from IRS rules currently in place to bar tax deductions for purely elective and cosmetic procedures. These would include, he said, anything “not necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease."  But some medical professionals worry about the interpretation. For instance, would breast reconstruction surgery following a mastectomy qualify, in that the disease itself did not misshape the breast, but rather the treatment of the disease caused the disfigurement.

To date, the only tax on cosmetic medical procedures imposed in the US has been in the state of New Jersey, a 6% tax, and early indications are that the state has realized a 59% shortfall based on projected revenue estimates  when the legislature passed the measure in 2004. At least six other states – Texas, Illinois, Washington, Arkansas, Tennessee and New York – have such Botax bills introduced or budget provisions proposed, although none of them have actually passed such legislation.

“Medical professionals in the cosmetic surgery industry object to this tax provision because it doesn’t really reach the wealthy as intended, but rather it falls largely on women making less than 90,000 a year which is just the type of person we a supposed to be helping with healthcare reform and other economic stimuli the democrats are proposing,” said Dr. Raval. “Today many working people are turning to cosmetic procedures to heighten their employment prospects in today’s competitive working environment. Contrary to what the Senate Democrats are saying, this unfair cosmetic tax is indeed a tax on the middle class.”

According to statistics from the ASPS, in 2008 there were 12 million cosmetic plastic surgery procedures that would be subject to the tax performed in the United States, a 3% increase from 2007. Of those 1.7 million were surgical procedures, with breast augmentations (307,000 procedures; down 12% from 2007), nose reshaping (279,000 procedures, down 2%), liposuction (245,000 procedures, down 19%), eyelid surgery (221,000 procedures, down 8%), and tummy tucks (122,000 procedures, down 18%), the leading categories.

The ASPS said that there were 10.4 million minimally-invasive cosmetic procedures last year, an increase of 5% over 2007. Leading the way were: Botox (5 million procedures, up 8%); hyaluronic acid fillers (1.1 million procedures, up 6%); chemical peels (1 million procedures, up 2%); laser hair removal (892,000 procedures, down 2%); and microdermabrasion (842,000 procedures, down 6%).

There were also 4.9 million reconstructive procedures, presumably non-taxable, including such things as tumor removal, laceration repair, scar revision, hand surgery and breast reduction, the ASPS said. This category rose 3% from 2007 tallies.

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Denver Facial Plastic Surgeon, Jeffrey Raval, M.D., F.A.C.S. is triple-board certified by the American Board of Facial Plastic and Reconstructive Surgery and the American Board of Otolaryngology / Head and Neck Surgery.