http://spectator.org/archives/2010/04/09/over-the-counter-goes-under They won't be so opposed to it once they see what's in it." That's the rationalization House leaders had given skittish Democrats to get them to walk the plank on Obamacare last month. But one of the first things millions of Americans will "see" is an effective 40 percent tax hike on the over-the-counter medicines -- from an... [more]
http://spectator.org/archives/2010/04/09/over-the-counter-goes-under
They won't be so opposed to it once they see what's in it." That's the rationalization House leaders had given skittish Democrats to get them to walk the plank on Obamacare last month.
But one of the first things millions of Americans will "see" is an effective 40 percent tax hike on the over-the-counter medicines -- from an antihistamine such as Claritin for allergies, pain relief medicine such as Tylenol or Excedrin, Pedialyte to prevent their kids from becoming dehydrated when they are sick, and even prenatal vitamins if they are expecting another one.
All of these items have two things in common. One is that they are classified as "over the counter" (OTC) medicines and available without a doctor's prescription. The other is that if you pay for any of these items with money in your flexible spending account (FSA) or health savings account (HSA) -- and according to this guide (pdf) from FSA administrator Benesyst, all of these are eligible expenses -- you will face an effective tax increase of up to 40 percent on these items in the health care bill that President Obama signed last month.
The bill restricts individuals with these pre-tax accounts to buying a "medicine or drug only if such medicine or drug is a prescribed" one. And ironically, this tax will raise health care costs substantially by creating incentives for the use of more expensive prescription drugs even when OTC drugs are just as safe and effective.
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Response by dc2172
almost 16 years ago
Posts: 20
Member since: Sep 2009
" And while the tax on "Cadillac" plans for union members was delayed in the reconciliation bill until 2018, no such luck for HSA and FSA account holders, many of whom are self-employed and entrepreneurs."
Punishing the self-employed and entrepreneurs to the benefit of union members is the Democrat dream come true, isn't it?
wow, We don't consume OTC (nor prescribed), but do use and FSA for co-pays. It's the 1st time I hear there were changes to those accounts.
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Response by malthus
almost 16 years ago
Posts: 1333
Member since: Feb 2009
If the American Spectator says so, it must be true. In other news, The Weekly World News is reporting that Octomom has been abducted by aliens.
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Response by GraffitiGrammarian
almost 16 years ago
Posts: 687
Member since: Jul 2008
I think it's gibberish, although I'm trying not to think too hard about it.
Here's why: the EXISTING rules for flexible spending accts say that you have to use it to buy drugs that are prescribed. All FSA's are ALREADY set up this way. You can't use your FSA to pay for vitamins, for example, unless you got a prescription from youu doc for vitamins.
Same with accumpuncture -- it's eligible for FSA spending ONLY if you got a script from your doc for it.
So how is Obamacare any diffferent from what already exists? I think this is shrill gobble-de-gook.
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Response by Riversider
almost 16 years ago
Posts: 13572
Member since: Apr 2009
For those who need to see it in a place other than American Spectator. I hope the New York Times isn't too right wing.
April 11, 2010, 2:03 am
How Does this Bill Affect Health Savings Accounts?
By THE NEW YORK TIMES
Q.
How does this bill affect health savings accounts? — Rita, California
A.
According to Sara Collins, a vice president at the Commonwealth Fund, a nonprofit, nonpartisan foundation focused on improving the health care system, there are two major ways health savings accounts are impacted by the legislation.
First, starting next January, the legislation excludes over-the-counter drugs from being reimbursed on a pre-tax basis from H.S.A. accounts.
Second, also starting next January, the legislation increases the penalty tax on distributions from H.S.A.’s that are not used for qualified medical expenses to 20 percent from 10 percent (see more on this here).
Dan Perrin, director of the HSA Coalition, a group of H.S.A. providers and users, said that there could be a growth spurt after the law passes if the uninsured opt for the lower cost, higher deductible insurance options that are eligible for pairing with an H.S.A.
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Response by GraffitiGrammarian
almost 16 years ago
Posts: 687
Member since: Jul 2008
Mmm, I think the number of over-the-counter meds that people are paying for with their FSA's (and therefore are getting prescriptions for), is relatively very small.
I mean, do you call your doc and get him to write you a script for Tylenol, so you can use your FSA money to pay for it? How many people do that?
I'm sure there is a limited number of people who have the underlying conditions that justify doing this, and I'm also sure this was put into the healthcare act as a bone thrown to the Pharmaceuticals.
It's sort of mildly interesting, but I can't think it amounts to much. For the vast majority of people it won't mean anything at all.
" And while the tax on "Cadillac" plans for union members was delayed in the reconciliation bill until 2018, no such luck for HSA and FSA account holders, many of whom are self-employed and entrepreneurs."
Punishing the self-employed and entrepreneurs to the benefit of union members is the Democrat dream come true, isn't it?
wow, We don't consume OTC (nor prescribed), but do use and FSA for co-pays. It's the 1st time I hear there were changes to those accounts.
If the American Spectator says so, it must be true. In other news, The Weekly World News is reporting that Octomom has been abducted by aliens.
I think it's gibberish, although I'm trying not to think too hard about it.
Here's why: the EXISTING rules for flexible spending accts say that you have to use it to buy drugs that are prescribed. All FSA's are ALREADY set up this way. You can't use your FSA to pay for vitamins, for example, unless you got a prescription from youu doc for vitamins.
Same with accumpuncture -- it's eligible for FSA spending ONLY if you got a script from your doc for it.
So how is Obamacare any diffferent from what already exists? I think this is shrill gobble-de-gook.
For those who need to see it in a place other than American Spectator. I hope the New York Times isn't too right wing.
http://prescriptions.blogs.nytimes.com/2010/04/11/how-does-this-bill-affect-health-savings-accounts/
April 11, 2010, 2:03 am
How Does this Bill Affect Health Savings Accounts?
By THE NEW YORK TIMES
Q.
How does this bill affect health savings accounts? — Rita, California
A.
According to Sara Collins, a vice president at the Commonwealth Fund, a nonprofit, nonpartisan foundation focused on improving the health care system, there are two major ways health savings accounts are impacted by the legislation.
First, starting next January, the legislation excludes over-the-counter drugs from being reimbursed on a pre-tax basis from H.S.A. accounts.
Second, also starting next January, the legislation increases the penalty tax on distributions from H.S.A.’s that are not used for qualified medical expenses to 20 percent from 10 percent (see more on this here).
Dan Perrin, director of the HSA Coalition, a group of H.S.A. providers and users, said that there could be a growth spurt after the law passes if the uninsured opt for the lower cost, higher deductible insurance options that are eligible for pairing with an H.S.A.
Mmm, I think the number of over-the-counter meds that people are paying for with their FSA's (and therefore are getting prescriptions for), is relatively very small.
I mean, do you call your doc and get him to write you a script for Tylenol, so you can use your FSA money to pay for it? How many people do that?
I'm sure there is a limited number of people who have the underlying conditions that justify doing this, and I'm also sure this was put into the healthcare act as a bone thrown to the Pharmaceuticals.
It's sort of mildly interesting, but I can't think it amounts to much. For the vast majority of people it won't mean anything at all.