As the health care reform becomes more and more clear we are starting to see the debate to repeal certain aspects. This recent legislation to repeal makes a lot of sense. The entire purpose of the Health Savings Accounts and Flexible Spending Accounts is to make consumers more engaged in their health care spending. With these plans there is tax free dollars that can be used for the purchases of health care. One of the big issues is over the counter drugs (OTC). From a consumer standpoint if your acid reflux drug can be purchased OTC for $7 for a 90 day supply compared with a brand name drug that is $89 for 30 days supply that is a huge cost savings. If the OTC treats the conditions effectively and your Doctor agree it just makes sense. With the HSA and FSP account you can use pre tax money to buy the OTC drug thus creating consumerism. The new health care law take away the tax incentives of using your money for OTC drugs.
Senator Kay Bailey Hutchison’s (R-TX) recently-introduced Patients’ Freedom to Choose Act, legislation that repeals two provisions included in the Patient Protection and Affordable Care Act.
Under current law, starting in 2011, the PPACA will prohibit individuals from using either their Health Savings Account (HSA) or Flexible Spending Account (FSA) funds to purchase over-the-counter medication unless they have a prescription from their doctor. And, starting in 2013, the PPACA institutes an annual FSA contribution cap of $2,500.
The Patients’ Freedom to Choose Act strikes these arbitrary provisions from the law. Many individuals and employers will benefit from this important legislation. Over 80% of all large employers that offer an FSA to their employees include a limit that is over this $2,500 threshold. According to a report issued by America’s Health Insurance Plan, over ten million Americans are insured with an HSA-compatible plan.