Congress Increases Healthcare Costs Again

[teflor the ranger]

New legislation comes into effect Jan 1, 2011 that further restricts how you can use your FSA and what you can use it on.

First, you will not be able to use your FSA debit cards to purchase OTC medications, even with a prescription. You must front your dollars to make the purchase and then seek reimbursement against your FSA.

Second, you must have a prescription for the following OTC drugs in order to have your purchase reimbursed:

o Acid Controllers
o Allergy & Sinus
o Antibiotic Products
o Antidiarrheals
o Anti-Gas
o Anti-Itch & Insect Bite
o Anti-Parasitic Treatments
o Baby Rash Ointments/Creams
o Cold Sore Remedies
o Cough, Cold & Flu
o Digestive Aids
o Feminine Anti-Fungal/Anti-Itch
o Hemorrhoid Preps
o Laxatives
o Motion Sickness
o Pain Relief
o Respiratory Treatments
o Sleep Aids & Sedatives
o Stomach Remedies

Without a prescription, you will not be reimbursed from your FSA, and unused FSA dollars will be lost at the end of the year.

By requiring you to visit a doctor for a prescription for tylenol to be reimbursed, Congress has again sided with the healthcare industry and continues to adopt measures that substantially increases their share of the GDP. By requiring people to get a prescription for Advil to be reimbursed by their own FSA, Federal government continues to reach into the personal lives and decisions of the taxpayer to feed an already burgeoning industry in the most corrupt manner.

For the many taxpayers that sought an FSA to protect their medical needs, they are no longer sheltered by the protection a separate FSA provided to their personal finances. Having to put up dollars from their wallet, the point of having a separate FSA to allow for access to money for unexpected medical care is attacked and severely weakened.

Congress: making you dive for quarters for the Tylenol you had to get a prescription for. Don't worry, eventually and after submitting a couple pages of intrusive paperwork, you might get reimbursed for it with your own money.

[Corth]

I always hated the mechanics of an FSA. Why not just allow a tax credit for qualified medical expenses and leave it at that? It will create so many new administrative costs to handle the requests for reimbursement. Presumably those costs will be shifted to employers and ultimately borne by workers getting lower wages than they otherwise would.

[Sarvis]

I always hated the mechanics of an FSA.

Agreed, it always seemed silly.

I doubt many people are going to pay an extra $20-$30 to visit their doctors and get prescriptions for a $5 bottle of pills though.

This is more of a snub to the otc drug industry, which will probably see very slightly reduced sales... or maybe it will actually reduce FSA administrative costs as people stop bothering with FSA accounts or use them less!

[Corth]

Actually, I think you hit the nail on the head in your last sentence. FSA's are going to be used less, which I think is the intent of the changes. In the absense of any corrective legislation (tax credit for medical expenses, etc.), it basically amounts to a stealth tax increase for the middle class.

[teflor the ranger]

Simplifying the FSA would have reduced costs. This is a straight up tax increase and funneling of money into the healthcare industry.

[kiryan]

I used my fsa once to get lasik. I like the idea of FSA but hate the operation of it. It puts more control on spending in the consumer's hands, but I always hated how you lose the money if you don't spend it (the hsa I believe rolls over year to year). I like Corth's suggestion that it just be a deduction (although it needs to be a special class of deduction otherwise it would be pointless due to the standard deduction). Rather than have it be a pre-tax thing, I think it should just be a normal expense. Our whole system of pre tax post tax is unncessarily complicated and I'm not sure what it does except lower government revenues and increase costs in pre-taxable areas like healthcare.

[Ragorn]

Or we could just nationalize healthcare already and you wouldn't have to worry about it anymore.

[Corth]

Wouldn't have to worry about paying for it. Would have to worry about getting it.

You couldn't resist coming back to start a political debate Ragorn!

[Ragorn]

The only reason I click that link right now is to see if Gormal responds to me. I miss my Jake.