NCPA - National Center for Policy Analysis


November 20, 2009

If you're considering Botox to erase frown lines or liposuction to get rid of love handles, you might want to move fast.  The "botax" may be on the way, says the Kaiser Health News.

  • The $848 billion health care bill unveiled Wednesday by Senate Majority Leader Harry Reid (D-Nev.), includes a 5 percent tax on cosmetic procedures and surgeries.
  • The tax, which would take effect in January, would raise an estimated $5 billion over the next decade to help pay for extending health care coverage to millions of Americans.

Plastic surgeons decried the proposal, saying their practices were battered by the recession and are just beginning to recover.  Some worried that the tax would be applied to more and more procedures:

  • About 12 million cosmetic procedures and surgeries -- which typically aren't covered by insurance -- were performed last year, at a total cost of $10.3 billion, according to the American Society of Plastic Surgeons.
  • The vast majority, 10.4 million, were minimally-invasive services such as Botox injections and chemical peels.
  • The most common surgeries were breast augmentation, liposuction and tummy tucks, but all of those procedures declined at double-digit rates last year.

New Jersey, where a 6 percent levy on cosmetic procedures and surgeries took effect in 2005, is the only state with such a tax.  Doctors there say many patients go to New York or Pennsylvania for the most expensive procedures to avoid the tax, which has brought in about $11 million a year, only about half as much as expected.

According to Devon Herrick, a health economist with the National Center for Policy Analysis, the tax will reduce demand for the procedures; it won't crater the industry, but it will affect the growth rate.

Source: Phil Galewitz, "Plastic Surgeons Cry Foul Over 'Botax' Proposal In Senate Health Bill," Kaiser Health News, November 19, 2009.

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