The $50 Bottle of Aspirin: Your HSA, FSA & ObamaCare

Over 33 million Americans have Flexible Spending Accounts (FSAs) that allow them to make pay-roll contributions in tax-free dollars that can be used toward out-of-pocket medical expenses. Another 10 million Americans have Health Savings Accounts (HSAs) tied to high deductible health insurance policies that have a similar provision. Since their introduction in the 1970s and 2003 respectively, FSAs and HSAs have been a good deal for Americans, 35% of whom rely on home remedies and over-the-counter drugs rather than go to the doctor (source: Kaiser Family Foundation, Trends in Health Care Costs & Spending 2008). Yet as of January 1, 2011, with U.S. out-of-pocket medical expenses expected to surpass $297 billion dollars this year, a provision in the Affordable Care Act (ObamaCare) put major restrictions on how FSA and HSA dollars could be spent.  But the real frosting on this health reform cupcake is that many eligible OTC expense now require a doctor-issued prescription to qualify.

Let’s say you take an OTC medication for chronic acid reflux. Last year, all you needed to do was save your receipt to claim the reimbursement from your FSA or HSA. Now you have to call your doctor. If you’re lucky, he or she will simply phone in a multi-refillable prescription to your pharmacy. But the high volume of requests for OTC RXs is placing another paperwork burden on doctors, and many are responding by charging $5 or $10 to process the requests. So now your $12 Prilosec could cost you $22, and you have fewer dollars in your FSA or HSA to use toward actual health care needs.

Other doctors are requiring that you come in for an office visit before they’ll write the OTC scrip. This is partly on advice from their malpractice coverage carriers who fear the litigation that might ensue. Say your doctor phones in an aspirin RX for you and you end up with a bleeding ulcer as a result. Who are you going to sue? The aspirin manufacturer or your doctor?  So now you’ve got a $50 bottle of aspirin.

And wait till you get to the drugstore to pick up your OTCs. Pharmacists must now process your aspirin, cough syrup and hemorrhoid preparation like the prescribed drugs they are. That means printing labels for each bottle and bagging each separately.  If it’s 2 a.m. and your kid needs cough syrup, you’ll probably forgo the tax advantages and headed for the closest convenience store that’s open.

Even with reduced contributions and new hoops to jump through, flexible spending accounts and health savings accounts with high deductible insurance policies are still a great way to save money. You can shop for high deductible insurance policy quotes online.

For more information on this topic please see these other ejournal articles: FSAs and HSAs: What’s the Difference and Health Insurance Update: What Will & Won’t be FSA Reimbursable in 2011.


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