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Health & Finance: A Prescription For A Headache

As part of the new health care law, workers with Flexable Spending Accounts (FSA’s), and Health Savings Accounts (HSA’s), that want to get reimbursed for over the counter drugs and remedies will need a prescription from their doctors in order to get reimbursement for such purchase. Read full story AP

WASHINGTON – A headache awaits people who use those tax-free health spending accounts to pay for over-the-counter allergy relievers, heartburn blockers and other drugstore remedies. Starting next year, you’ll need a prescription for the drugs to qualify.

The change in so-called Flexible Spending Accounts is part of the new health care law, and doctors are bracing for patient confusion and annoyance as they decide how to handle prescription requests for products that people normally use on their own.

“A huge hassle,” predicts Dr. Roland Goertz, president of the American Academy of Family Physicians.

Flexible spending accounts, or FSAs, are pretax dollars that workers can set aside through their employers to pay out-of-pocket health care costs. That includes insurance copays and deductibles, treatments that an insurance plan may not cover, eyeglasses, dental work and, yes, nonprescription medications.

But the new health care law says over-the-counter drugs qualify for reimbursement through FSAs starting Jan. 1 only if the patient has a doctor’s prescription. The only exception is for insulin bought without a prescription. (The new rule applies to similar Health Savings Accounts, too.)

Another change comes in 2013, when the new law will set a $2,500 cap on how much can be set aside in an FSA. Many employers currently allow up to $5,000 to be put into the accounts — reflecting that they tend to be used for pricier expenses than OTC drugs. Today’s average set-aside is about $1,500, says Rose Stanley of WorldatWork, a human resources association.

For now, what do savvy patients need to know in planning for over-the-counter purchases in next year’s FSA?

_The estimated 35 million FSA users must spend all their set-aside money each year or lose it. People tend to use leftover dollars by stocking up on aspirin and other drugstore staples at year’s end, and the prescription requirement may put a crimp in that spree next fall.

_According to the Internal Revenue Service, the prescription requirement is only for OTC medications, not other non-drug health supplies such as contact lens solutions, bandages, crutches and blood-sugar test kits. These will merely require a receipt for reimbursement, just like today.

_Next year the health care law also eliminates preventive service copays, such as for well-child visits, mammograms and vaccinations, possibly altering how much people put into an FSA in the first place.

_Most affected by the OTC rule will be daily users of those drugs — like people who treat arthritis with ibuprofen, or gastric reflux with Prilosec OTC, or hay fever with Claritin. They will have to calculate if any extra doctor visits offset the pretax savings.

The change shouldn’t cost extra if your doctor knows you’ve been taking OTC medicines routinely and thus has no trouble writing a prescription by phone or at your next regularly scheduled visit, says Dr. Gary Rogg, an internist with Montefiore Medical Center in New York. In that case, the change wouldn’t cost anything extra.

If you’ve never mentioned taking a particular OTC drug, the doctor may demand an office visit, with its copay, before pulling out the prescription pad.

“If a 20-year-old wants to buy Prevacid because of heartburn, odds are it’s diet-related. If it’s a 60-year-old, you really are obligated to do a ‘workup'” in case the pain signals something worse, Rogg says.

People who use high doses of OTC drugs might find a prescription-only version a better deal depending on their insurance copay rules, he adds, even if that’s costlier for the health care system overall.

Increasing communication about OTC drug usage would be a good side effect of the rule change, says Dr. Joshua Freeman, family medicine chairman at the University of Kansas Hospital.

“If you’re taking something I think is bad for you, I’m glad I found out,” he says.

But Goertz says it’s not clear exactly what’s required for an OTC prescription. If he writes one for a 30-day supply of ibuprofen with 11 refills but the arthritis patient buys once in bulk, will the FSA provider honor that reimbursement?

And there’s an added wrinkle for the millions who use special FSA debit cards to pay for purchases straight from their account. IRS guidelines say those debit cards can’t be used for over-the-counter drugs under the new change, and will have to be reimbursed by turning over a copy of their receipt and prescription to their FSA provider.

The National Association of Chain Drug Stores has asked the IRS to reconsider, predicting customer anger if the debit card works for one kind of purchase but not another.

Stay tuned: It’s not clear if the IRS will alter its guidelines, which are open for public comment until Dec. 27.

___

EDITOR’s NOTE — Lauran Neergaard covers health and medical issues for The Associated Press in Washington.

12 Comments

  • Nana says:

    When will people realize that when gov’t gets involved in a business whether auto, banking or healthcare….it costs the taxpayers more money than if they just stayed out of it. Will be interesting to hear the complaints from those who think they don’t have to pay for their medical care when they see their MD.

  • Felicity says:

    It may be repealed. Both Mitch McConnell and John Boehner have filed to challenge the constitutionality of health care reform law. Link provided

    http://blogs.abcnews.com/thenote/2010/11/boehner-challenges-constitutionality-of-health-reform-law.html

  • Fasteddie says:

    The article Double O posted is exactly why it’s headed that way. Tinker? Screw tinkering, just repeal it. Tinker is a codeword for “deals”. Once it starts it never ends. When the spendthrifts in congress see how much leverage they can have when agreeing to a change in the bill they cash in on that leverage for something in exchange. And so it begins.

  • aqualung says:

    Interesting take on that Fasteddie. I never thought of it, but I can see how the politicians will use this bill as a tool for cajoling and wheeling and dealing. The tax code has been so complex for so long and has been engineered to structure deals cut by politicians, and now the health care bill will be used for the same thing. Good point Fasteddie. If that’s the case then yes we are doomed. Wake up people, demand your elected representatives repeal this fiasco.

  • Fasteddie says:

    I’m afraid congress is going to make this new health care bill a pork barrel Christmas tree item in the budget much like our tax code. It will become a convoluted (ok it already is) implementation of government policy and every year the items in the health bill will be used as trade offs by politicians just like tax laws are now. We’ll cut this out or down in exchange for this to add or increase. This is a huge Pandoras box. We’re doomed.

  • DoubleO says:

    Unfortunately politics will play a part of the repeal process.

    http://www.cleveland.com/politics/index.ssf/2010/11/republicans_goal_of_repealing.html

    A mistake in my opinion. By holding out to use the health care bill as a tool for the 2012 elections they are running the risk of it becoming mre entrenched into the system. Rpeal now or it’s forever there.

  • JWL says:

    i found this part of the article unbelievable

    People who use high doses of OTC drugs might find a prescription-only version a better deal depending on their insurance copay rules, he adds, even if that’s costlier for the health care system overall.

    i thought the health care bill was going to reduce costs???

  • Fasteddie says:

    How much time is this going to cut into a doctors schedule for this frivolous piece of compliance? This is becoming like our judicial system but instead of the courts being clogged up with frivolous lawsuits, the doctors office will be clogged up with people waiting for a piece of paper. Ridiculous.

  • Ed Eagle says:

    Well for all those that wanted this health care bill, are you happy now??

  • aqualung says:

    This is just the beginning of the horrors to come out of Obamacare. After a year of relentless opposition by the American people, Pelosi and her thugs rammed this bill down our throats totally disregarding the that the majority of the country did not want it. The new Congress would do well to move quickly in repealing this mess.

  • JWL says:

    i guess they really didn’t read the bill before passing it. a perfect example of how government when in control, makes things worse. this whole health care bill needs to be repealed and fast.

  • Fasteddie says:

    So let me get this straight. If I buy some OTC items, in order for me to be reimbursed for them I need to go to my doctor, pay for an office visit, and then wait for him to fill me a prescription? Unbelievable.

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