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Restoration of OTC expenses for FSA, HRA and HSA gains momentum

This morning a long front-page article in the Wall Street Journal attacks the adverse impact of PPACA restrictions on OTC purchases by FSAs, coming just as several bills are introduced in House and Senate to fix CDH accounts.

The article cites several newly-discovered problems with the OTC ban impact, including perverse incentives that are created for patients to move back to brand name drugs, to seek more office visits, and to increase the admin expenses of pharmacies, physicians and retail chains. Although most of it is anecdotal there is strong evidence that the OTC ban is causing higher national health spending, and possibly reducing medical quality.

“Some 33 million Americans are in families that have flexible spending accounts,” the article notes, and HRAs and HSAs are also impact by the ban. “The over-the-counter provision is emerging as a top target for change,” and both HHS Secretary Sebelius and Treasury officials are looking at it. The AMA and chain drug stores are backing a repeal of the OTC ban.

12 Bills Eye CDHP Changes In PPACA
So far at least 12 bills have been introduced in Congress to fix or repeal changes in CDH plans under PPACA including 3 bills in the Senate. At least 35 House members co-sponsored a bill. The most popular change is removing the OTC payment ban for HSAs, HRAs and FSAs, including a bill by Sen. Kay Bailey Hutchison with 9 co-sponsors that is expected to be part of a Senate Finance Committee bill. Even a bill by liberal Sen. Barbara Boxer (D-CA) and co-sponsored by a Republican gives FSAs to members of the military. None of the bills expands CDH accounts or modifies PPACA in other ways.

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