Senate Bill Contains "Facelift Tax"

The Wall St. Journal reports the new Senate health care bill imposes a 5% tax on receipients of elective plastic surgery.

The tax would fall on the individuals who undergo the procedures. If they don’t pay it when they’re billed for their surgery, then it falls to the provider who performed the procedure.

Who gets the most plastic surgery? It's not the young.

Then there's the tax on "Cadillac health plans" defined as health care plans with premiums over $8,500 a year. The insurer pays it, but to recoup it, won't they just reduce benefits the plan provides? Anthem already sent out a letter that when renewed, my plan will no longer cover 100% of prescriptions. I bet this tax on Cadillac plans results in the plans becoming Chevys. [More...]

Then there's the increase in medicare payroll tax for individuals earning more than $200k a year. The House proposal taxed income over $500k. I don't think we should have both a tax on cadillac plans and a medicare payroll tax increase for those earning $200k.

One way or another, I think all these taxes are going to be passed on by the companies to the consumer. Not only the wealthy will be affected. I think those between ages 50 and 60 will be disproportionately and adversely affected. We're already paying sky-high premiums and we have years to go before Medicare kicks in. Maybe we should lower Medicare eligibility to age 60. I think that would be fair.

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    It's not your point... (5.00 / 1) (#2)
    by NealB on Wed Nov 18, 2009 at 11:18:03 PM EST
    ...but they should lower Medicare eligibility to 25. All problems solved.

    medicare (none / 0) (#5)
    by jharp on Wed Nov 18, 2009 at 11:42:35 PM EST
    Medicare for all.

    And pay for it with a payroll tax. Just like the rest of the modern world.

    It's that simple.


    agreed. (none / 0) (#16)
    by cpinva on Thu Nov 19, 2009 at 02:13:04 AM EST
    Medicare for all.
    And pay for it with a payroll tax. Just like the rest of the modern world.

    it's the only sensible thing to do. that's why it'll never happen. same reason that medicare is prohibited from using it's economic clout, to negotiate better deals from the drug companies, just like wal-mart does.

    i expect an excise tax on elective plastic surgery will hit hollywood the hardest. of course, who gets to define "elective"?


    Elective? (5.00 / 1) (#4)
    by dissenter on Wed Nov 18, 2009 at 11:22:10 PM EST
    So a person has an accident and is left with disfiguring scars. Lets say they have "healed" physically but the scars remain. They will get taxed 5% for wanting to look like a human?

    One person's "elective" surgery is another person's mandatory surgery. I do not believe Congress should be an arbitrator over what is "elective" for other people.

    And that is only one problem I have with this disaster of a bill.

    dissenter (none / 0) (#6)
    by jharp on Wed Nov 18, 2009 at 11:46:01 PM EST
    No (none / 0) (#12)
    by MikeDitto on Thu Nov 19, 2009 at 12:40:59 AM EST
    The tax only applies to surgery that "is not necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease."

    So what (none / 0) (#29)
    by Slado on Thu Nov 19, 2009 at 09:07:02 AM EST
    Plastic surgeons don't exist in a vaccum.  They employ thousands of people who rely on elective procedures to pay their bills.

    What do people think drives our economy?  yacht's fancy cars, homes, vacations, and plastic surgery results in millions of jobs and paychecks.   The wealthy have to do something with their money don't they?

    Tax a service and you decrease the demand and that sends ripples through the economy.


    Everything has an effect (5.00 / 1) (#31)
    by Steve M on Thu Nov 19, 2009 at 09:25:59 AM EST
    but you gotta raise the revenue from somewhere, so it's silly to act like the choice is between taxes and no taxes.  And in terms of everything we could possibly tax, I'm pretty sure demand for yachts is relatively inelastic.

    Though.. (5.00 / 1) (#33)
    by kdog on Thu Nov 19, 2009 at 09:29:53 AM EST
    I don't think the wealthy are gonna walk away from a nose job because of a 5% tax...if the sticker price didn't shock 'em.

    That being said, like any other new proposed tax, I wanna hear concrete reasons why it is necessary...as well as my pipe dream of the entire budget being justified before any new tax is passed.


    Do you (5.00 / 1) (#43)
    by TeresaInSnow2 on Thu Nov 19, 2009 at 01:00:41 PM EST
    really think that a 5% tax is going to prevent a wealthy person from getting plastic surgery?  Doubtful.

    indexed to inflation? (5.00 / 1) (#23)
    by jedimom on Thu Nov 19, 2009 at 07:19:33 AM EST
    it appears the Senate Cadillac tax is not indexed to inflation which would allow it to act as the AMT does now and catch more and more middle class people going forward

    If only we could find a way to have our cake (5.00 / 2) (#48)
    by Radix on Thu Nov 19, 2009 at 01:36:45 PM EST
    and eat it too. No such thing as a free lunch folks, somebody has to pay.

    True... (none / 0) (#50)
    by kdog on Thu Nov 19, 2009 at 04:34:09 PM EST
    but instead of a new tax, we could simply stop paying for something else...thats another option.

    Question. (none / 0) (#1)
    by phat on Wed Nov 18, 2009 at 11:13:53 PM EST
    How does an insurance company pass a modest tax increase on the wealthy onto consumers?

    I agree with you on the "Cadillac health plans" tax, but honestly.

    And claiming that elective plastic surgery is a tax on older people?

    That's a bit silly.

    Agreed on the elective surgery (none / 0) (#19)
    by CoralGables on Thu Nov 19, 2009 at 06:53:26 AM EST
    Now there could be an argument that a tax on elective plastic surgery might be a tad sexist in that it adversely effects beauty pageant contestants.

    Have you looked at the Governator's face job? (none / 0) (#54)
    by Ellie on Thu Nov 19, 2009 at 07:54:05 PM EST
    It's got hospital corners. Tax the rich f*ckers, I say. Tax'em all and let TMZ sort'em out.

    Rebrand 'elective botox' to elective wrinkle abortion and throw that in the Stupak-Pitts Gang's hopper.

    Can you hear us now, Speaker Pelosi, from the ears in the back of your head?

    As discussed upstream, I'm all for covering cosmetic work to repair damage due to accident.


    Plastic surgery (none / 0) (#3)
    by Radiowalla on Wed Nov 18, 2009 at 11:19:01 PM EST
    is the ritual mutilation of the wealthy.

    When plastic surgery is for cosmetic purposes only it is a luxury item, much like a yacht or a Chanel suit.   Putting a tax on it is fine by me.  Nancy Pelosi can well afford it.

    My mother is not wealthy (5.00 / 1) (#7)
    by nycstray on Thu Nov 19, 2009 at 12:13:17 AM EST
    but she chose to have her upper eyes done. That area was drooping down to a point that she thought it would eventually interfere with her eyes. It's something that happens on her side of the family. I was actually surprised when she said she was getting her eyes done, until she explained. Yeah, I guess you would call it elective surgery. One that I may want/feel the need for also . . . Has nothing to do with Chanel suits or a yacht.

    That's actually a "cosmetic" (none / 0) (#25)
    by Inspector Gadget on Thu Nov 19, 2009 at 07:59:05 AM EST
    procedure that is covered by insurance now if it is interfering with vision. Has been that way for decades. My sister had it done because of her Graves disease, and my ex had it done because of the vision interference. Both were covered.

    Thanks for the info (none / 0) (#39)
    by nycstray on Thu Nov 19, 2009 at 10:46:47 AM EST
    it's been quite awhile since mom had it done. Hadn't even thought about it until now :)

    Medicare paid (none / 0) (#53)
    by Radiowalla on Thu Nov 19, 2009 at 06:12:08 PM EST
    for my father to have it done when he was in his 70s because he couldn't see and his eyelashes were scratching his eyeballs.  It took several levels of approval before the surgery was OK'd.  

    Surgery for purely cosmetic purposes is never covered by insurance and it should stay that way.  


    $8,500 a year (none / 0) (#8)
    by caseyOR on Thu Nov 19, 2009 at 12:19:55 AM EST
    seems like a low threshold, especially of one counts both the employer and the employee contributions to the cost of premiums.

    And that seems very low for an individual family plan. I'm not talking about plans with a lot of frills. Just basic plans with reasonable deductibles.

    It is. Average is almost $9000 a year (none / 0) (#9)
    by Cream City on Thu Nov 19, 2009 at 12:36:10 AM EST
    across the country, according to a study reported today in my local media.  So most Americans on employer plans will pay a tax for that.  Oh joy.

    Those numbers seem a little fuzzy (none / 0) (#24)
    by Steve M on Thu Nov 19, 2009 at 07:41:03 AM EST
    The study reports the average cost per employee.  In other words, if your company has 20 employees, they ask how much your group health insurance premium costs each year, and then they divide by 20.

    But of course, many of those employees are going to have family members who are covered as well.  They don't really break the numbers down between individual and family coverage.  So that total number is actually buying insurance for a lot more than 20 people.

    The Kaiser Foundation seems to say the number is more like $4,824, which seems more plausible.


    Nope -- almost 3000 firms surveyed (none / 0) (#27)
    by Cream City on Thu Nov 19, 2009 at 08:32:07 AM EST
    for this study: "Mercer's findings are based on a late-summer survey of more than 2,900 employers with at least 10 employees each," but the majority were sizeable employers.

    And here come the soaring costs:  "Nationwide, many small employers held down their 2009 cost increases by significantly boosting deductibles. Such increases loom next year regardless of company size, the Mercer survey indicates."


    Maybe I was unclear (none / 0) (#32)
    by Steve M on Thu Nov 19, 2009 at 09:28:45 AM EST
    my point applies even if you want to substitute the number 200000 for 20.  If a company has 200000 employees, all they're doing is taking the annual health care premium and dividing by 200000.  If the study involves 200000 companies with 200000 employees each, all they're doing is taking the health care premiums of those 200000 companies and dividing by 200000.  The point is that we're not just talking about individual coverage for each employee, in many/most cases we're talking about family coverage.  The study does not appear to distinguish, it just talks about how much money employers pay per employee.

    The law will tax individuals (none / 0) (#34)
    by Cream City on Thu Nov 19, 2009 at 09:33:59 AM EST
    after all, and individuals like me in a state with 'way higher averages, so I find little comfort in your comfort with this.  And the limit appears to be based on some average, some study . . . so I hope we find out which one, and soon, to examine this.  But that won't happen in time, if Reid pushes this through as soon as he wishes.

    Comfort is not the issue (none / 0) (#35)
    by Steve M on Thu Nov 19, 2009 at 09:53:23 AM EST
    I am talking straight facts here.  The $8500 threshold in the law and the $9000 finding in your study are not measuring the same thing.

    As best as I can determine, the $8500 threshold appears comparable to the $4824 average found by the Kaiser foundation.  It's about employers covering INDIVIDUAL employees, not about employers covering employees + their families, which is obviously more expensive.


    It's $23,000 for a family plan (none / 0) (#10)
    by MikeDitto on Thu Nov 19, 2009 at 12:37:40 AM EST
    And it wouldn't apply to Jeralyn or anyone else on the individual market because it's a tax on employer-sponsored benefits, not a tax on on insurance.

    $8500 for an individual in a group plan (none / 0) (#11)
    by Cream City on Thu Nov 19, 2009 at 12:40:43 AM EST
    is how I read it.  It ought to be higher.

    I disagree (none / 0) (#13)
    by MikeDitto on Thu Nov 19, 2009 at 12:48:58 AM EST
    If you're getting employer-sponsored coverage that costs more than $8,500 in one of the relatively low-cost states, you're getting screwed. You're likely working for a small business that can get similar coverage in the exchange for much less money.

    It's also not a tax paid by you, it's a tax on the insurance company. So if they want to keep the business, they'll stop gouging your employer on the rates.


    I pay $8,220 (5.00 / 1) (#41)
    by Jeralyn on Thu Nov 19, 2009 at 11:23:40 AM EST
    and it will go up to $12,000 in June due to my age change. It's a small employer plan and a good one. (Even though it has a high deductible.) If Anthem has to pay a tax on it, they are going to reduce the benefits (not my premiums) or stop offering the plan. Healthy, older people have sky-high premiums, its just a fact of life. They are doing away with premium differentials based on gender and pre-existing conditions, but there's no relief that I see for healthy, older, non-poor  older people .

    Except the exchange and the public option (none / 0) (#46)
    by MikeDitto on Thu Nov 19, 2009 at 01:06:06 PM EST
    And the small business shared risk pools, and the limits on age rating, and the tax credit equal to 50% of your premium.

    And... (none / 0) (#55)
    by ColumbiaDuck on Fri Nov 20, 2009 at 11:39:51 AM EST
    Insurance company reforms that keep them from dropping you if you get sick or injured or putting lifetime limits on your coverage.  Much more likely to help older Americans than young ones.

    Right, because the (none / 0) (#14)
    by caseyOR on Thu Nov 19, 2009 at 12:53:02 AM EST
    not gouging thing is such a big part of their business plan. Let's not forget that in many states there is only one, or maybe two, insurance companies from which to choose. And we know they collude on pricing, thanks to that anti-trust exemption.

    Fair point (5.00 / 1) (#15)
    by MikeDitto on Thu Nov 19, 2009 at 01:03:59 AM EST
    But they'd still rather have you business than not have it. We just went through this at my work and managed to get our premium cut in half without any change in coverage just because the insurance company had sold us one of their outrageous plans in the past and never bothered to mention this other, much cheaper plan with a $10 higher copay.

    i believe the exchange (none / 0) (#17)
    by cpinva on Thu Nov 19, 2009 at 02:18:34 AM EST
    would eliminate that "built-in" monopoly, by enabling businesses to choose from other company's plans. one reason why the insurance companies are adamantly opposed to HCR.

    You're disagreeing with the data (none / 0) (#18)
    by Cream City on Thu Nov 19, 2009 at 06:48:44 AM EST
    that the average is $8,945.  I do not make this up.

    And I already cited elsewhere that I'm in one of the highest-cost states, with an average of $10,888, and I stated the reason why -- because my state has one of the highest populations already covered by state-run health insurance, from our very high state taxes.  So we're going to get scr*wed for it.

    And I already stated that I work for the largest employer in my state:  the state itself.  

    So if you're feeling disagreeable about it all, it must be for other reasons.


    Since this won't go into effect (5.00 / 1) (#26)
    by Inspector Gadget on Thu Nov 19, 2009 at 08:03:04 AM EST
    until 2014, the insurance companies have ample time to make sure everyone will qualify for this tax :)

    I think (none / 0) (#56)
    by ColumbiaDuck on Fri Nov 20, 2009 at 11:41:51 AM EST
    You are reading the data wrong.  They took the average a company pays per employee, but those employee's plans may include a spouse or child(ren).  So the company is paying for coverage covering many more people than just those who work for them.  Factoring in all people covered would bring the average down.

    But only the employee is paying (none / 0) (#57)
    by Inspector Gadget on Fri Nov 20, 2009 at 12:00:02 PM EST
    for the insurance. It's an average. Does it say the annual premium is per individual to trigger the tax, or the total deduction amount from the person's paycheck as the trigger?

    plans (none / 0) (#58)
    by ColumbiaDuck on Fri Nov 20, 2009 at 03:27:44 PM EST
    the "cadillac" plans are defined by how much is spent per person.  so if my family plan costs 15,000 a year, but i have a spouse and two kids, that is not a cadillac plan.

    No, that would be at the $23,000 (5.00 / 1) (#60)
    by Cream City on Fri Nov 20, 2009 at 05:22:52 PM EST
    level for the family plan.  You must have missed some of the posts above.

    It is stated as an individual cost (none / 0) (#59)
    by Cream City on Fri Nov 20, 2009 at 05:21:51 PM EST
    i.e., total premiums for an individual plan.  So I think you missed that, as what you are suggesting simply does not apply.

    In USA Today (none / 0) (#20)
    by CoralGables on Thu Nov 19, 2009 at 07:03:01 AM EST
    "The average cost of a family policy offered by employers was $13,375 this year, up 5% from 2008, the Kaiser Family Foundation and the Health Research & Educational Trust survey found"

    The median may be more useful (none / 0) (#22)
    by Cream City on Thu Nov 19, 2009 at 07:18:39 AM EST
    to know, and we'll hope that Congress knows it.  And this is the combined cost of both employer and employee?  The report I cited, released yesterday, did not cite a figure for family plans.  More is to be reported, and I'll watch for it, and then we'll hope to see some reasons for variance.

    I don't think the excise tax (none / 0) (#21)
    by andgarden on Thu Nov 19, 2009 at 07:13:44 AM EST
    will survive conference.

    The bill is lousy (none / 0) (#28)
    by Slado on Thu Nov 19, 2009 at 09:03:46 AM EST
    Simply put it does absolutely nothing to bend the cost curve as promised and expands government.

    I don't think it's worth it and you pile on top extra taxes that will effect us all and its a negative drag on the economy when the economy should be issue #1.

    Plastic surgeons are small business owners.   They employ 5 to 100 people depending on the size of their practice and if they have partners or not and pay taxes like any small business.   Adding a 5% tax to their services will decrease the demand for their services and effect the economy just as it would if you imposed a tax on any business.

    It's a bad idea but the democrats have to find some way to pay for this monstrosity so they will tax whoever they can get their hands on.    

    This just makes me laugh (none / 0) (#30)
    by CoralGables on Thu Nov 19, 2009 at 09:23:45 AM EST
    While most are worried about people getting necessary healthcare, you are more concerned with someone possibly passing on getting implants, a nose job, or liposuction.

    people already get helathcare (none / 0) (#36)
    by Slado on Thu Nov 19, 2009 at 10:11:45 AM EST
    The question is do they have insurance to pay for it.

    It's not just plastic surgeons who will pay higher taxes.  It's all of us and that will hurt an already hurt economy and we will get absolutely no payoff in the form of lowering medical costs.

    Costs will continue to rise and may rise faster then they would have if we did nothing at all.


    Harvard Medical School (5.00 / 1) (#37)
    by Slado on Thu Nov 19, 2009 at 10:15:55 AM EST
    Weighs in.

    Simply put, the bill stinks.


    From link above... (none / 0) (#38)
    by Slado on Thu Nov 19, 2009 at 10:18:34 AM EST
    Worse, currently proposed federal legislation would undermine any potential for real innovation in insurance and the provision of care. It would do so by overregulating the health-care system in the service of special interests such as insurance companies, hospitals, professional organizations and pharmaceutical companies, rather than the patients who should be our primary concern.

    Yeah (none / 0) (#45)
    by TeresaInSnow2 on Thu Nov 19, 2009 at 01:05:26 PM EST
    we'll all have health insurance, because our Congress is in the process of making it illegal to NOT have health insurance....that's what universality is all about.  We'll universally go to jail if we don't give our hard-earned cash to he insurance company or pay the govt a fee for not doing so.

    Kay, end rant.


    8500 for an individual (none / 0) (#40)
    by waldenpond on Thu Nov 19, 2009 at 11:14:34 AM EST
    Two or more persons is $23,000.  There is a tax on pharmacys and on name brand pharmaceuticals... on top of pharmaceutical corps already doing price increases in advance of any legislation, that is quite a jump in prices.

    Not the Young? (none / 0) (#42)
    by kaleidescope on Thu Nov 19, 2009 at 12:50:10 PM EST
    Maybe not in Denver, but here in Humboldt County, California no self-respecting up and coming twenty-something dope grower will take a girlfriend unless she is very naturally endowed or she has had a boob job that makes her look like she is.

    So we have plenty of 18 year old women getting boob jobs here, probably many more than older women who have face-lifts.  This ain't Hollywood, after all.

    Boob jobs for the Knights of Toyota set -- what can you say?

    Well, I would say that you need (none / 0) (#44)
    by Cream City on Thu Nov 19, 2009 at 01:00:51 PM EST
    more self-respecting women there.

    But then, we knew that.


    Not Sure What You Mean (none / 0) (#49)
    by kaleidescope on Thu Nov 19, 2009 at 03:39:02 PM EST
    I grew up in the Seventies in the Cream City and am quite familiar with the "self-respectedness" of the women who live by the light of the Polish Moon.  My mother is one of them.

    We are talking, here, about a small subset of women anywhere -- those who have plastic surgery.  These people are almost by definition somewhat lacking in self-respect, at least that seems to be the tenor of your argument and I don't really disagree.  

    Beer Town certainly has its share of face lifts from Elm Grove to Wauatosa to Bayside.  And it probably also has its share of boob jobs, though the women who can afford this elective surgery are likely to be somewhat older.  

    How Humboldt County differs from Milwaukee is that there is a certain, relatively large subset of early twenties men who are very wealthy -- making several hundred thousand dollars a year in cash tax free.  They have a taste for large breasts and are willing to pay for them.  This subset of YOUNG men is much smaller in Southeastern Wisconsin.  

    But I think the self-respectedness of the women and the tastes of the young men are probably not that different from Humboldt County self-respect and taste. The real difference is that in Humboldt, there is actually money to fulfill the (stupid) fantasy.

    Yet one more strange wrinkle in a local economy dominated by easy money.


    Not that I hang around (none / 0) (#52)
    by Cream City on Thu Nov 19, 2009 at 05:13:19 PM EST
    with North Shore Nancies much, or the equivalents in Waukesha County, but I do know my Tosa Town.  And I know some plastic surgeons who say that almost all of their work here is reconstructive, not elective.  I don't recall seeing anyone here with a facelift, that Joan Rivers look. . . .

    As for breast jobs, the only ones I know of here -- considering the hefty builds of the beer-drinking, cheese-curd-loving who live under the Polish Moon! -- are actually breast reductions to ease back pain.  Or, of course, breast restoration after breast removal for cancer.

    But when I went to California a while ago, yikes!  I must have been around one of those areas where the younger set likes to go under the knife.  However, the many California women I know, sisters-in-law and the like, are the self-respecting sort who are aging gracefully.:-)


    I wouldn't (none / 0) (#47)
    by TeresaInSnow2 on Thu Nov 19, 2009 at 01:06:11 PM EST
    call that self-respecting.  More, I'd call it self-dis-respecting.

    There will be a run on plastic surgery (none / 0) (#51)
    by Inspector Gadget on Thu Nov 19, 2009 at 05:06:29 PM EST
    of the elective nature between passage of the bill and implementation if this tax is approved :)