The unintended consequences of health care reform are starting to surface. As reported in the Wall Street Journal March 9, patients are pressuring their doctor to write prescriptions for over the counter medications now banned from reimbursement through a flexible spending account or health savings account.
C’omon doc it’s only cough syrup.
This provision was the brainchild of congressional staffers looking for additional funding to support the reform legislation. The logic also held that if there was permitted use of a OTC drug with a physician’s prescription there would be less of an incentive for people to use medication requiring a prescription by law when a less expensive OTC version was available. However, as more prescription drugs have OTC versions the patient’s costs go up because many prescription plans will no longer pay for the prescription version of a drug such as Claritin, Prilosec, etc. From the patients perspective it often comes down to paying the standard plan co-pay or the full cost of the OTC version. Since they are barred from using the plan they are forced to use the OTC at full cost. Now the tax advantage to doing so is gone.
As with many such provisions Congress failed to understand how these things work or the extent to which people will go to protect their benefits. In addition to the new burden placed on physicians, the Journal reports that retailers had to change codes on thousands of OTC items because many people use special debit cards to be reimbursed for flexible spending account expenses.
The entire concept of the FSA is questionable and logic would dictate that this tax break for a limited number of Americans not only drives higher spending on health care, but is a waste of tax dollars, especially in the current deficit environment.
In fact, because of the “use it or lose it” provision imposed by the IRS on such plans, patients do frequently shop till they drop at year – end so they do not lose the money they have placed in the FSA. This is done by getting a last-minute eye exam or dental check up, loading up on OTC drugs (pre 2011), buying a new pair of prescription sun glasses, etc. It would be far better to allow all money placed into the FSA to roll from year to year. The money forfeited is not a gain for the federal government, that revenue is lost when the money is placed into the plan. If we are going to continue with the FSA, the lose it or use it provision should be removed in light of the new $2,500 cap on contributions imposed by PPACA.
However, politicians in true fashion find it impossible to tell the truth or bite the bullet so they simply make things more complicated and worse for doctors, retail pharmacies and patients.
For more on the FSA debate click here
Related Articles
- Health-Care Overhaul’s Unintended Side Effects (online.wsj.com)
- In Health Law, Rx for Trouble (online.wsj.com)
- Law of Unintended Consequences Bites Obamacare (professorbainbridge.com)
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