Groups Unite Under Stop Medical Taxes Coalition

As the Senate continued to debate the Democrats' health reform proposal, it was not clear whether a proposed 5% tax on elective cosmetic surgery, including injectables, would survive the floor fight and the eventual conference committee to reconcile the House and Senate bills.

Physician groups—not just dermatologists—have united in opposition to the tax, saying that it is discriminatory, and, they point out, it has proven to be an inefficient means of collecting revenue in the only state with such a tax.

Even so, the American Academy of Dermatology expects more states to look at a cosmetic tax as a potential revenue source this year, Dr. David Pariser, president of the AAD, said in an interview.

New Jersey has taxed elective cosmetic procedures since 2004, levying a 6% fee at the point of sale—the physician's office—but the state has had a 59% shortfall based on projected revenue estimates, according to the Stop Medical Taxes Coalition. The newly formed group, which is sponsored by Botox maker Allergan Inc., represents 22 medical organizations, the AAD, the American Society for Aesthetic Plastic Surgery (ASAPS), the American Society for Dermatologic Surgery Association, the American Association of Neurologic Surgeons, and the American Society of Breast Surgeons.

The American Medical Association also came out in opposition to the tax. In a letter to Senate Majority Leader Harry Reid of Nevada, the AMA said that it “strongly opposes taxes on physician services to fund health care programs or to accomplish health system reform.” The organization said that it was concerned that the exceptions outlined in the bill weren't clear enough or broad enough.

And, said the AMA, the tax could be expanded in the future to cover other health care items or services that might not be considered medically necessary.

The Stop Medical Taxes Coalition wrote to all 50 Senators in late November, outlining its objections. A chief argument: The tax would fall disproportionately on working women.

According to survey data collected by the American Society of Plastic Surgeons in 2005, about one-fourth of the women planning to have surgery in the next 2 years reported income of $30,000–$60,000 a year, suggesting that the tax would hit middle earners, not high-income women.

“This tax is effectively a 'Soccer Mom' tax that will adversely impact mainstream American wives and mothers, who are the majority of plastic surgery patients,” Dr. Renato Saltz, president of the ASAPS, said in a statement.

In a separate letter, the AAD said that the proposed tax would insert the government into the physician-patient relationship “in a new way,” partly because it would be in charge of determining what was medically necessary. Under the proposal's language, an HIV-infected patient with lipoatrophy might be taxed for seeking treatment for what is arguably a disfiguring condition, the AAD wrote.

Rather than tax these patients, the AAD suggests that the federal government levy tanning bed users.

“A federal tax on indoor tanning could deter individuals, especially young people, from the practice,” Dr. Pariser said.

In New Jersey, the tax has led to patients choosing not to have procedures, and it has driven them to seek treatments in neighboring states, said Dr. David Goldberg, a dermatologist with practices in both New Jersey and New York. He said that he had New Jersey patients who went to his New York office to avoid the tax.

Also, “it is not a cost-effective tax,” said Dr. Goldberg, because the administrative costs for the program outweigh the revenue. In an interview, he predicted that state legislators would probably succeed in repealing the tax, especially since there is a new Republican governor friendly to the anti-tax effort and the state is seeking to enhance revenues and bolster savings.

For that same reason, Dr. Pariser said that he expects many states in the coming year to look at a cosmetic tax as a source of revenue. It is especially likely in Connecticut and New York, he said.

The AAD is calling on state societies to help mobilize dermatologists against such tax efforts, Dr. Pariser said.

As the Senate continued to debate the Democrats' health reform proposal, it was not clear whether a proposed 5% tax on elective cosmetic surgery, including injectables, would survive the floor fight and the eventual conference committee to reconcile the House and Senate bills.

Physician groups—not just dermatologists—have united in opposition to the tax, saying that it is discriminatory, and, they point out, it has proven to be an inefficient means of collecting revenue in the only state with such a tax.

Even so, the American Academy of Dermatology expects more states to look at a cosmetic tax as a potential revenue source this year, Dr. David Pariser, president of the AAD, said in an interview.

New Jersey has taxed elective cosmetic procedures since 2004, levying a 6% fee at the point of sale—the physician's office—but the state has had a 59% shortfall based on projected revenue estimates, according to the Stop Medical Taxes Coalition. The newly formed group, which is sponsored by Botox maker Allergan Inc., represents 22 medical organizations, the AAD, the American Society for Aesthetic Plastic Surgery (ASAPS), the American Society for Dermatologic Surgery Association, the American Association of Neurologic Surgeons, and the American Society of Breast Surgeons.

The American Medical Association also came out in opposition to the tax. In a letter to Senate Majority Leader Harry Reid of Nevada, the AMA said that it “strongly opposes taxes on physician services to fund health care programs or to accomplish health system reform.” The organization said that it was concerned that the exceptions outlined in the bill weren't clear enough or broad enough.

And, said the AMA, the tax could be expanded in the future to cover other health care items or services that might not be considered medically necessary.

The Stop Medical Taxes Coalition wrote to all 50 Senators in late November, outlining its objections. A chief argument: The tax would fall disproportionately on working women.

According to survey data collected by the American Society of Plastic Surgeons in 2005, about one-fourth of the women planning to have surgery in the next 2 years reported income of $30,000–$60,000 a year, suggesting that the tax would hit middle earners, not high-income women.

“This tax is effectively a 'Soccer Mom' tax that will adversely impact mainstream American wives and mothers, who are the majority of plastic surgery patients,” Dr. Renato Saltz, president of the ASAPS, said in a statement.

In a separate letter, the AAD said that the proposed tax would insert the government into the physician-patient relationship “in a new way,” partly because it would be in charge of determining what was medically necessary. Under the proposal's language, an HIV-infected patient with lipoatrophy might be taxed for seeking treatment for what is arguably a disfiguring condition, the AAD wrote.

Rather than tax these patients, the AAD suggests that the federal government levy tanning bed users.

“A federal tax on indoor tanning could deter individuals, especially young people, from the practice,” Dr. Pariser said.

In New Jersey, the tax has led to patients choosing not to have procedures, and it has driven them to seek treatments in neighboring states, said Dr. David Goldberg, a dermatologist with practices in both New Jersey and New York. He said that he had New Jersey patients who went to his New York office to avoid the tax.

Also, “it is not a cost-effective tax,” said Dr. Goldberg, because the administrative costs for the program outweigh the revenue. In an interview, he predicted that state legislators would probably succeed in repealing the tax, especially since there is a new Republican governor friendly to the anti-tax effort and the state is seeking to enhance revenues and bolster savings.

For that same reason, Dr. Pariser said that he expects many states in the coming year to look at a cosmetic tax as a source of revenue. It is especially likely in Connecticut and New York, he said.

The AAD is calling on state societies to help mobilize dermatologists against such tax efforts, Dr. Pariser said.

As the Senate continued to debate the Democrats' health reform proposal, it was not clear whether a proposed 5% tax on elective cosmetic surgery, including injectables, would survive the floor fight and the eventual conference committee to reconcile the House and Senate bills.

Physician groups—not just dermatologists—have united in opposition to the tax, saying that it is discriminatory, and, they point out, it has proven to be an inefficient means of collecting revenue in the only state with such a tax.

Even so, the American Academy of Dermatology expects more states to look at a cosmetic tax as a potential revenue source this year, Dr. David Pariser, president of the AAD, said in an interview.

New Jersey has taxed elective cosmetic procedures since 2004, levying a 6% fee at the point of sale—the physician's office—but the state has had a 59% shortfall based on projected revenue estimates, according to the Stop Medical Taxes Coalition. The newly formed group, which is sponsored by Botox maker Allergan Inc., represents 22 medical organizations, the AAD, the American Society for Aesthetic Plastic Surgery (ASAPS), the American Society for Dermatologic Surgery Association, the American Association of Neurologic Surgeons, and the American Society of Breast Surgeons.

The American Medical Association also came out in opposition to the tax. In a letter to Senate Majority Leader Harry Reid of Nevada, the AMA said that it “strongly opposes taxes on physician services to fund health care programs or to accomplish health system reform.” The organization said that it was concerned that the exceptions outlined in the bill weren't clear enough or broad enough.

And, said the AMA, the tax could be expanded in the future to cover other health care items or services that might not be considered medically necessary.

The Stop Medical Taxes Coalition wrote to all 50 Senators in late November, outlining its objections. A chief argument: The tax would fall disproportionately on working women.

According to survey data collected by the American Society of Plastic Surgeons in 2005, about one-fourth of the women planning to have surgery in the next 2 years reported income of $30,000–$60,000 a year, suggesting that the tax would hit middle earners, not high-income women.

“This tax is effectively a 'Soccer Mom' tax that will adversely impact mainstream American wives and mothers, who are the majority of plastic surgery patients,” Dr. Renato Saltz, president of the ASAPS, said in a statement.

In a separate letter, the AAD said that the proposed tax would insert the government into the physician-patient relationship “in a new way,” partly because it would be in charge of determining what was medically necessary. Under the proposal's language, an HIV-infected patient with lipoatrophy might be taxed for seeking treatment for what is arguably a disfiguring condition, the AAD wrote.

Rather than tax these patients, the AAD suggests that the federal government levy tanning bed users.

“A federal tax on indoor tanning could deter individuals, especially young people, from the practice,” Dr. Pariser said.

In New Jersey, the tax has led to patients choosing not to have procedures, and it has driven them to seek treatments in neighboring states, said Dr. David Goldberg, a dermatologist with practices in both New Jersey and New York. He said that he had New Jersey patients who went to his New York office to avoid the tax.

Also, “it is not a cost-effective tax,” said Dr. Goldberg, because the administrative costs for the program outweigh the revenue. In an interview, he predicted that state legislators would probably succeed in repealing the tax, especially since there is a new Republican governor friendly to the anti-tax effort and the state is seeking to enhance revenues and bolster savings.

For that same reason, Dr. Pariser said that he expects many states in the coming year to look at a cosmetic tax as a source of revenue. It is especially likely in Connecticut and New York, he said.

The AAD is calling on state societies to help mobilize dermatologists against such tax efforts, Dr. Pariser said.