A proposed 10 percent tax on indoor tanning services is part of a revised Senate healthcare reform bill now headed to conference committee with a House bill.
On Dec. 24, the Senate passed an amended bill that replaces a proposed 5 percent tax on elective cosmetic surgery with the tanning tax, at the behest of groups including the American Academy of Dermatology (AAD), the American Medical Association and various pharmaceutical manufacturers.
Should the tanning tax survive conference hearings, to begin later this month, and if the healthcare reform measure passes, the tax will support public health by discouraging indoor tanning, says David M. Pariser, M.D., AAD president.
As proposed, the tax would apply to tanning bed end-users, Dr. Pariser says. It would raise an estimated $2.7 billion through 2019.
The elective procedures tax would have raised $5.6 billion over 10 years.
Dr. Pariser says he has heard that tanning salon owners probably would absorb the tax themselves rather than charging customers.
The AAD didn't consider the cosmetic procedures tax workable because "it was very poorly defined in terms of what it would cover," and could have resulted in the creation of a new bureaucracy to determine whether the tax would apply to benign skin lesions or other problems not expressly listed, Dr. Pariser says.
Caroline Van Hove, vice president of corporate communications for Allergan, the maker of Botox (onabotulinumtoxinA), says the company is "very pleased that the Senate and the majority of Americans agreed with the position that the proposed cosmetic tax was a random hit, targeting the wrong audience … and did not serve the goals of healthcare reform."
An Allergan-sponsored survey found that 52 percent of respondents opposed the so-called "Botax," and nearly two-thirds agreed that the tax would disproportionately impact middle-class women, Ms. Van Hove says.
The cosmetic surgery tax "wasn't a tax on the wealthy," says Jason Hanson, executive vice president and general counsel, Medicis. "It was a tax on working men and women. We believe the tanning tax is a much better public policy decision.
"The FDA (Food and Drug Administration) has come out with a statement (in November 2009) saying that tanning facilities are a main driver in causing skin cancer," he says.
The Indoor Tanning Association strongly opposes the proposal.
"I would encourage the dermatology community to spend more time reviewing the growing body of science that demonstrates the benefits of exposure to ultraviolet light, rather than trying to line their pockets by manipulating the legislative process," says John Overstreet, executive director.
Other amendments to the Senate bill championed by Sen. Harry Reid, D-Nev., include a lower first-year tax burden than originally proposed for health insurers. However, the Senate proposal contains no long-term fix for Medicare's sustainable growth rate (SGR) formula, used to set physician reimbursement, according to an AAD analysis. The House has already passed a repeal of the controversial formula, delaying a 21.2 percent cut originally set for Jan. 1.
Regarding the tanning tax's chances of surviving conference committee hearings, Dr. Pariser says he has heard positive feedback from senators with whom the AAD has been working. The tax "probably will remain" in the combined House and Senate bill, Mr. Hanson adds, "but until it's finally passed, it's hard to prognosticate about that."