American government to impose cosmetic surgery tax

A proposed government tax on cosmetic surgery is part of the latest set of bills on US healthcare reform. It expects to receive $5.8 billion over ten years. The tax will apply to medical tourists coming to the USA.

The five-percent tax will be on all elective cosmetic surgery in the US. The measure exempts plastic surgery done to remedy a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease.

Individuals who seek purely elective procedures, typically paid for directly out of patients' pockets, will have to pay the new tax from January 2010.The tax will be paid by the patient receiving the cosmetic procedure and collected by the doctor. If the patient fails to pay the tax, the medical professional that performed the procedure will be liable. The tax will apply to all, including medical tourists to the US.

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 cosmetic surgery industry, such a tax would in fact target the middle class and working women in particular.

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.

About 12 million cosmetic procedures and surgeries were performed last year. The vast majority were minimally invasive services such as Botox injections and chemical peels. The most common surgeries were breast augmentation, liposuction and tummy tucks.

Some have suggested that the tax could drive people to go overseas, as although a 5% price rise may not be much, it will make people shop around and perhaps consider overseas locations.

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