Got OTC?
CHPA’s New Leaders Have Big Plans to Make OTCs a Bigger Part of U.S. Health Care
By Michael Johnsen 3/24/11
…The Consumer Healthcare Products Association leaders want lawmakers and policy advisers to think of over-the-counter medicines: as an essential component of American health care. Clearly, access and affordability strike right at the heart of many of the CHPA’s most critical issues, including the recent change in the tax code that ended flexible spending account eligibility for OTC purchases under FSA plans without a doctor’s prescription. “We know that about 20 million households have FSAs, and that [more than] half of them use their FSAs to purchase OTC products — we’re talking about 10 million households that were relying on it. We believe that’s contrary to the goals of healthcare reform, which were to expand access and [reduce] costs.” The real impact will be quite the opposite, CHPA president and CEO Scott Melville said, including a sharp rise in the number of physician visits and a real increase in consumers’ out-of-pocket healthcare costs. By CHPA estimates, of the approximate 10 million households that used FSA dollars to purchase an OTC product in 2010, about 37% plan to seek a prescription under the new rules. What could that cost? According to data from the Foundation for HealthSmart Consumers, if just 10% of consumers opted to see their doctor for an OTC prescription, total healthcare spending would increase $4.5 billion in year one…
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©2011 Lebhar-Friedman, Inc.
In Health Law, Rx for Trouble
By Janet Adamy 3/9/11
This recent article highlights the unintended consequences of portions of new health care reform law. As of Jan. 1, consumers can no longer pay for over-the-counter (OTC) medicines using pre-tax dollars in health care accounts, except when prescribed by a health care provider. As The Foundation predicted in forecasting models published last year, this change is leading to consumer confusion, burdens on health care providers and additional costs to the system. By driving consumers back to their doctors, the law is essentially negating the tenet of appropriate self-care for common conditions.
…The result is that Americans are visiting their doctors before making a trip to the drugstore, hoping their physician will help them out by writing the prescription. The new requirements create not only an added burden for doctors, but also new complications for retailers and pharmacies. “It drives up the cost of health care as opposed to reducing it,” says Dr. Chung (a Fairfax, VA pediatrician), who rejected much of a 10-item request from a mother of four that included pain relievers and children’s cold medicine…
For more information, read The Foundation for HealthSMART Consumers perspective paper on the value of self-care, “Concerns for Unintended Consequences Regarding the Ineligibility of OTCs for Purchase with Health Care Account Funds”.
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©2011 Dow Jones & Company, Inc.
5 OTC Remedies for American Health Care
By Michael Johnsen 3/4/11
…From the cover story of the March 4th issue of Drug Store News, the FSA rule change is the top story related to American health care costs. “According to The Foundation for HealthSMART Consumers, if only 10% of consumers opted to see their doctor for an OTC prescription, overall health care costs would increase $4.5 billion in one year.”…
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©2010 Lebhar-Friedman, Inc.
Lobbyists Challenging Limits On Health Flexible Spending Accounts
By Jordan Rau 2/2/11
…A New Jersey nonprofit is giving lawmakers an economic analysis showing that the over-the-counter restrictions will lead to $695 million in extra health care spending a year. The major reason: Since the law allows such purchases if patients get a prescription, some consumers will go to their doctors more often, and those physicians may end up prescribing more expensive drugs. The report was put together by The Foundation for HealthSMART Consumers, which says patients should have a greater financial role in their own health care decisions and gets part of its funding from consumer health product makers…
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© 2011 Henry J. Kaiser Family Foundation
Flex Accounts: Over-the-Counter is Out-the-Door
By Shawn Zeller 12/6/10
…Starting Jan. 1, the new health care law will prohibit those with flexible spending accounts from using the money to buy over-the-counter medicines, unless they have a prescription. That would cost drug companies and drugstore chains dearly, and with less than a month left to persuade Congress to repeal the provision they have stepped up their lobbying campaign against what they call the “cough and cold tax.” “Flex” accounts allow consumers to set aside money before taxes to pay for medical expenses. The new law generally puts over-the-counter remedies off the table…
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© 2010, CQ Press, A Division of SAGE Publications
Rules for Flexible Spending Accounts Change Jan. 1
By Sandra Block 11/2/10
…For most people, getting a doctor’s note for over-the-counter drugs shouldn’t be a problem, says Jody Dietel, chief compliance officer for WageWorks, which administers flex accounts for employers. “Presumably, you’re not taking over-the-counter drugs and medicines that your doctor wouldn’t want you to take,” she says…
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© 2010 USA TODAY
Change in Drug Payment Rule May Trigger Headaches
Published November 16, 2010 | Associated Press
… 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…
And Fox News Broadcast 10/27/10
Robert Zirkelbach, AHIP
…That’s going to add cost at the doctor’s office… An incentive for me to use a higher cost prescription medication, instead of using the more affordable over-the-counter medication that works just as well…
Jim Angle, FOX Reporter
…Not only that, but with chronic conditions, such as allergies, it might be cheaper to get a prescription drug if your health plan has a reasonable co-pay…
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©2010 FOX News Network, LLC
Acne Cream? Tax-Sheltered. Breast Pump? No.
By David Kocieniewski 10/26/10
…With the new regulations set to take effect in two months, millions of American workers now in the open enrollment period at their employers have to determine whether, and how much, to set aside for 2011…
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©2010 The New York Times Company
Excerpts from Op. Ed
By Mark K. Siegel 10/26/10
…Starting Jan. 1, Jane won’t be able to use her flex-spend account to cover OTC remedies without getting a prescription first. That’s right: She’ll need a prescription for non-prescription drugs — a waste of her time, and mine. Otherwise, she has to pay a 20 percent penalty for using the account to buy exactly the sort of things it was designed to cover…
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©2010 NYP Holdings, Inc.
Op Ed on Health Care Reform
By Donald Riker, PhD 10/18/10
…Another expert report from The Foundation for HealthSMART Consumers found consumers are weighing the cost of expensive OTC drugs in favor of co-pays for prescription alternatives thereby jacking up healthcare costs…repeal of the IRS inclusion of OTC drugs in Flexcomp before-tax plans used by working Americans would hurt. If repeal of this tax shield converts even 10% of OTC consumers to “cheaper” Rx co-pays this will drive healthcare costs up $2.5billion/year assuming doctor visits, but not even including time lost at work and other indirect costs. Retailers are now estimated to have to delete 15,000 sku’s from their software systems, a task deemed impossible in the next two months before the new tax year. Consumers who will take the biggest hit are lower and middle income families who suffer allergies, reflux & heartburn, arthritis, and those who wish to stop smoking…
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©2010 On Point Advisors, LLC
