Cosmetic Tax Proposal in Health Care Reform – Taxing Women and the Health Conscious

There is sure to be much discussion about a provision in the U.S. Senate’s version of Health Care Reform which would impose a tax on elective cosmetic procedures. With a tax rate of 5%, the measure presumably will raise close to $6 billion of the projected $850 billion price tag of the healthcare bill (most analysts agree that this projected cost is fancifully low).

Given the name of “Botax” by many, the intent of it is to clearly tax those who can ‘afford’ to pay it…some call it a tax on the wealthy. But those who do so clearly have no idea who really makes up the cosmetic population. The Botax name is a clever variation of Botox® facial injections which have become the beacon procedure for non-surgical office procedures used for wrinkle reduction. In theory, the Botax could impact about 12 million cosmetic procedures and surgeries performed each year in the U.S..

As one would expect, all sides of the cosmetic surgery industry from physicians to patients are voicing opposition. Their argument is that such a tax unfairly targets the middle class and working women in particular. Statistics from the American Society of Plastic Surgeons (ASPS) show that only a minority of people who undergo any form of cosmetic surgery has a household income greater than $90,000 per year and the vast majority (greater than 80%) are women between the working ages of 18 to 65. Clearly this is not a tax on the wealthy and is a discriminatory tax that falls largely on women.

While the idea that it is a tax on the wealthy is fallacious, it is a tax on the healthy. Contrary to what many would guess, the vast majority of cosmetic procedures are done are health-conscious individuals. Most are already reasonable fit and are ‘appearance focused’.  The obese, smokers, diabetics and other ‘unhealthy’ patients make up just a fraction of those people ever undergoing cosmetic procedures or surgery. This proposed discriminatory tax is targeting those who do take care of themselves to help some who have made poor health choices along the way. It would make more sense to tax unhealthy food items, for example, that have incredibly high fat content…and it would bring a hundred fold increases in revenue to support health care reform.

This type of tax proposal is also troubling because it treads on choppy waters that health insurance companies have trouble deciphering.  What is the official or tax definition of a cosmetic procedure? IRS rules for tax deductions state that any procedure necessary to treat a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease is a medical procedure. Anything else is a cosmetic procedure. Some delineation is quite clear- Botox® used for wrinkles or for migraines for example. But what about a tummy tuck to treat the effects of pregnancy?   Are the effects of childbirth on a woman’s abdomen a cosmetic or reconstructive procedure? 

With so many differences between the House and Senate Health Reform bills, it is difficult to say what will eventually shake out. But this hidden tax will largely penalize health conscious women. It is a troubling signal of how far reaching your legislators will go to get more of your hard earned money. And once again the beneficiaries of your ‘generosity’ will likely be those that have sacrificed less.

 Dr. Barry Eppley