(Bo)Tax on Elective Surgery

Updated 3/2017--  all links (except to my own posts) removed as many no longer active. and it was easier than checking each one.

I agree with all who feel there needs to be healthcare reform (or more honestly health insurance reform), but I don’t agree with Senator Harry Reid who feels one way to pay for it is by taxing elective surgery. 

This proposed tax has been dubbed the Bo-Tax and was first mentioned back in the summer.  Then it was proposed as a 10% tax on elective and cosmetic procedures.  Now it is proposed as a 5% tax on those procedures.

As defined by the Internal Revenue Code of 1986, "Any procedure which is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease."  These procedures would be the target of the proposed tax.

The price tag for the proposed bill (here in pdf ) is reported to be $849 billion over 10 years, according to the nonpartisan Congressional Budget Office.   The costs are reported be offset by reductions in the growth of Medicare and new taxes (including the bo-tax).

Mr. Reid’s bill (text available here) is expected to extend health insurance coverage to 31 million people who currently do not have any and add new benefits to Medicare.  So why should anyone who can pay for elective or cosmetic procedures care?  They are all wealthy, right?

Wrong.

Even though Americans may spend more than $10 billion each year on cosmetic surgery, most of these patients are female (86%) and most of them are middle income not the wealthy.  At least a third of them have incomes less than $30,000 per year.  Many of them have borrowed money to pay for the tummy tuck or breast augmentation or excision of excess skin (after lap band).  Many in this last group (the massive weight loss group) have to pay for the excision of the skin which hampers than hygiene or ambulation because their insurance won’t cover it (usually a rider or the way the policy is written).  Refer back to the definition of cosmetic surgery—surgery for this last group often does improve function of the body by making ambulation easier or hygiene better.

So now instead of borrowing $5000 or $10,000, the patient will need to borrow an added 5% to pay the federal tax.  This then will be subject to the interest on the loan.  It is a tremendous burden added to the wrong population.

I would agree with Malcolm Roth of the American Society of Plastic Surgeons, and a plastic surgeon at Maimonides Medical Center in Brooklyn, N.Y., who feels that such a a tax "would be a discriminatory tax against women."

I also object to the fact this tax would turn me into a tax collector.  If I don’t collect the tax from the patient, then I become liable for it.

COLLECTION.-Every person receiving a payment for procedures on which a tax is imposed under subsection (a) shall collect the amount of the tax from the individual on whom the procedure is performed and remit such tax quarterly to the Secretary at such time and in such manner as provided by the Secretary. "(3) SECONDARY LIABILITY.-Where any tax imposed by subsection (a) is not paid at the time payments for cosmetic surgery and medical procedures are made, then to the extent that such tax is not collected, such tax shall be paid by the person who performs the procedure.". (this section shall apply to procedures performed on or after January 1, 2010.)

If you would like to add you name to a petition apposing the botax, go here.

ASPRS Press Release:  Plastic Surgeons Respond To Proposed Cosmetic Surgery Tax