Updated at 2:38 p.m. on Nov. 19 to reflect continuing legislation.
Elective plastic surgeries -- like botox, breast augmentations or nose reshapings -- would be taxed at 5 percent. Medically necessary reconstructive surgeries would not be taxed.
Tummy tucks and facelifts could become more expensive to help pay for health care reform, after the surprising inclusion of a plastic surgery tax in the Senate health care bill.
One problem, critics say, is that the line between elective cosmetic surgery and reconstructive surgery is often blurred, so it could be difficult to determine which procedures fall into the taxed category.
For example, a woman having breast reconstruction surgery after a mastectomy for breast cancer may return for follow-up procedures, which could be classified as cosmetic, American Society for Aesthetic Plastic Surgery President Renato Saltz said.
And that raises the question of who should determine the necessity of a procedure -- the government, doctor or patient. Under the Senate plan, the patient would pay the tax to the doctor. Should the patient fail to pay, the provider would be liable for the 5 percent tax. The tax would apply whether the surgery was covered by an insurer or out of pocket.
"This is almost like the state trying to determine what is medically necessary. What would be next?" Saltz said, pointing to bariatric surgery or laser eye surgery as possible future targets of the tax.
Only New Jersey currently taxes plastic surgeries. New Jersey's 6 percent tax was passed in 2004, and at the time it was expected to raise around $24 million per year for charity health care funding. But the tax only brought in about $7.5 million in 2005, according to New Jersey's Treasury Department, leading the state's assembly to pass a repeal of the tax in 2006.
Gov. Jon Corzine (D) vetoed that repeal, and the tax is still in place. Revenue has since increased, and in 2007 the tax brought in about $11 million. Corzine's office did not respond to a request for comment on his veto.
"It's a tax that has had a negative impact on New Jersey's economy, tax base and business outlook," Assemblyman Joseph Cryan (D) told The Record in 2007. Cryan, who sponsored the bill creating the tax and later the bill repealing it, said the tax had not raised the expected revenue because patients were going to New York or Pennsylvania to get work done tax-free.
But that would not be a problem if a federal plastic surgery tax made the extra cost standard nationwide.
Still, opponents say the tax could be construed as discriminatory because the majority of plastic surgery patients are women -- in 2008, 91 percent of plastic surgeries were performed on women, according to the American Society of Plastic Surgeons -- and could impact the middle class, whose taxes Obama promised not to raise. According to a 2005 study by the society, 87 percent of plastic surgery patients have a household income under $90,000.
Individual patients could pay hundreds of dollars more under a new tax. Saltz estimated that breast augmentation might cost about $6,000, depending on the city; using that number, a patient could expect to pay about $600 more.
A 5 percent tax on plastic surgery is expected to raise an estimated $5 billion over 10 years. In 2008, Americans spent about $12 billion on cosmetic plastic surgery, according to the American Society for Aesthetic Plastic Surgery.
The tax on plastic surgery was under consideration by the Senate Finance Committee, but in August, Chairman Max Baucus, D-Mont., said the tax "hasn't been on any list I've seen in a long time," according to CongressDaily. However, the plan surprisingly ended up in the bill from Senate Majority Leader Harry Reid, D-Nev.
• "Plastic Surgery Tax Eyed As Revenue Raiser," CongressDaily, July 27
• "Finance Plan Won't Include Employer Mandate, Public Plan," CongressDaily, July 28