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Monday, September 13, 2010

You may need a prescription for aspirin -- for tax purposes

While we wait with amusement to see how America reacts to this spring's crazy, Wydenesque hash of health care "reform" -- when (and if) it finally takes effect -- here's a little taste of Congress messing with our minds. If you have a "flexible spending account" or "personal choice account" where you work, it allows you to pay your out-of-pocket medical expenses with pre-tax dollars. You designate part of each paycheck to the plan, and it holds the money to reimburse you. Under the tax rules, you're able to include reimbursements for over-the-counter drugs and remedies in that plan. And so cold remedies, cough syrups, aspirin, athlete's foot spray, topical antibiotics and other first aid items -- all are eligible for reimbursement out of the plan, which means that there's no tax on the money you spend on such items.

All of that is going to change come January 1. Under health care "reform," now you'll need a doctor's prescription for the over-the-counter drugs, or else you won't be able to reimbursed for them out of the tax-exempt plan.

Got that? You need a prescription... for nonprescription, over-the-counter drugs.

I guess Congress figures people will stop using their plans for things like aspirin and Nyquil. Screw that -- I'm going to the doctor and demand that he write me a prescription for every little anti-sniffle pill I need. That wicked hangnail needs Neosporin? Doc, please write me a scrip.

This is how our Congress fights the rising cost of health care. This is also why the American empire is fading so fast.

Comments (28)

So dumb! This sort of stuff is what gives the tea baggers traction.

Even gives the Tea Party traction too!

ObamaCare is going to be a disaster. Glad to see the less informed finally starting to realize it.

Control Freaks!

Just take care of the basics and leave us alone!

Is there anyone else who feels like a noose is tightening around our lives?

I know I'll get blasted for this but...

It kind of levels the playing field a little for all the minimum wage workers and other less fortunate among us whose employers don't offer such benefits as these accounts. I have to buy my Excedrin with after tax dollars after all.

It's as counter-intuitive as another accepted policy... Health insurance will pay for prescriptions, but not over-the-counter remedies. I can get a month's supply of Vicodin for free, but Excedrin -which works just as well with less side effects - costs about $50/ month.

This was one of the main reasons I didn't go with a HSA plan last year when shopping for healthcare. I read about this potential (now real) change. They want to get rid of Flex/HSA type plans.

Whether it is for safety reasons (sudafed prescription to reduce meth production) or taxes like this, the gov. wants more control.

If I'm in there taking up space in the doctor's office because I want a prescription for Advil, then it's going to take you longer to see the doctor for something serious or potentially life-threatening.

Oh for goodness sakes, over-the-counter drugs have been paid for out of pocket forever, now we're going to whine because we have to pay for them, just like we always did before?

Fact is, people would rather just pay for OTC meds than have to waste time at the Dr. If they're too poor to pay for them out of pocket, they'll waste their time at the Dr once, and Dr will give them an ongoing prescription that never expires, just to not have to see them back for their trivial OTC meds complaints.

We would all wish that the only things people needed were OTC remedies.

Seriously, you people would really go to a doctor - taking up everyone's (yours included) valuable - and as Michelle points out, limited - time and resources, to save what, 2 cents on your $8 bottle of Advil?

You can lay fault in a lot of places for why health care costs are sky rocketing.

Two solid points, Bartender. Perhaps the OTC drug companies' lobbyists will hammer away at this change that outrages everyone who posted prior to you and a lot of others, too.

Maybe physicians, alert to the potential for writer's cramp and more severe damage from repetitive scribbling, will also find their voices of protest.

One thing that can be said for the current administration's focus on health care reform is that it is an attempt to redress one of the most obvious inequalities in this wealthy society. We would be better served, however, were Obama's brightest to comprehend how most people employ their limited resources to maintain a semblance of health and well-being.

The cost of a Doctor's office visit is more than many bottles of aspirin. For those who have special needs for much medication, another matter and arrangements can be made.

What I am concerned about is the next step may be that one cannot buy anything without seeing a Doctor first. No vitamins, no self-help, no this or that without going through "the system". I imagine that the gov knows what we eat already. None of their business!!


Fahrenheit 451 may not be far behind. Whats next - hiding a bottle of aspirin in the cellar or hoping the police state won't come in to inspect to see if you have a stash of Vitamin C somewhere?

This provision was most likely included to prevent people from using their flex account dollars on things like Botox, face lifts and boob jobs. There are many "procedures" out there that are being paid for with pre-tax dollars, and it is clearly a line that needs to be drawn. As for people getting to pay for their Preparation H and the like with pre-tax dollars I agree that this type of thing is never offered to the vast majority of working class people.

It kind of levels the playing field a little for all the minimum wage workers and other less fortunate among us whose employers don't offer such benefits

Right, so lets go further...level the playing field for the rest of us that dont have the benefits we give public employees.

Or should we just make sure all employers give everyone the same benefits? After all, that would be the only "fair" thing to do.

On an $8 bottle of Advil, taking into account federal, state, and FICA taxes, many folks save something like $3.50.

This provision was most likely included to prevent people from using their flex account dollars on things like Botox, face lifts and boob jobs.

It has nothing to do with that. Cosmetic surgery has always been disallowed. This new restriction has to do only with OTC drugs.

Welcome to BlueOregon, where speculation is data and feelings are knowledge. (And with Portland Native we even have our own Carla Axtman who thinks every argument can be won by calling some one a tea bagger.)

Oh, come on now guys, you voted in this president and these democrats. You know that they know better, they keep telling us and then show us by doing things that the majority of the country doesn't want them to do - like vote in Obamacare. I mean just look at how many of them are running a campaign based on the wonders of Obamacare ... oh, sorry, I forgot they are trying to forget about it. Well, it won't be forgotten on us because it's just starting to eat at our pocketbooks. And it's not going to get better or cheaper, it's just going to cost us more and more and more. Is it November yet??

Ok, lets see if we can defend the indefensible.

What the legislation decided to do was to end using the Plan for OTC drugs, which you can agree with or disagree with, but as has been pointed out, OTC medicines have traditionally been excluded from medical plans and been the responsibility of the individual.

However, in an example of a good intention gone bad, they carved out an exception, that is, if your physician wants you to take an OTC medicine then the Plan money can be used for that. Since a prescription is not needed to buy the OTC medicine, the prescription is just documentation that the physician required it.

Thus the interpretation that it sounds like a rediculous requirement for a prescription for non-prescription medicine when all they were trying to do is give people a break from the change. No good deed ever went unpunished, had they simply excluded non prescription medicine from the Plans, like other medical insurance, the issue would not have arisen.

If the OTC medications are handled by pharmacies the same way sudafed is now, you aren't going to save a penny by going to the pharmacy to save a couple buck on taxes.

I was prescribed sudafed for allergies and it was going to cost me $28 bucks to fill it (with insurance). The same sudafed cost me under $5 to purchase in Vancouver without a prescription.

Any potential tax savings will likely be eclipsed by what the pharmacy charges to fill your prescription anyway.

Don't get me wrong, this idea is pretty lame - but bear in mind that you won't need a prescription to purchase the drug, just to get reimbursed for the cost by your FSA or HSA.

My point has been that although we won't need a prescription now to purchase OTC, - may be a slippery slope to being forced to get a prescription.

We need to pay heed to these incremental steps, or we will end up paying and paying in more ways than one.

Jack: . . .This is how our Congress fights the rising cost of health care. This is also why the American empire is fading so fast.

What does Congress know about health care?
They in their regal world of care treated like kings and queens, know not of the real world we live in either or the American empire wouldn't have faded as it has.

I think it's sort of hyperbolic to claim that the American empire is fading because the small percentage of people with HSAs (10 million or so) won't be able to claim their OTC medicine as medical expenses on their taxes like the other 300 million Americans.

I wouldn't be surprised to find out that the new restriction was put in place as a concession to Republicans who are constantly beating their drums over how the ordinary people abuse and take advantage of loopholes. Who, after all, was checking up on all those Walgreen's receipts to make sure that Mexican drug cartels weren't using this tax break to buy up stocks of pseudoephedrine for their meth labs and writing off the whole thing to the American taxpayer? I mean, when they were paying their taxes.

That leaves aside the entire idea of whether there should be an American "empire".

Just another tax increase that's not a tax increase.

I would speculate that United Health (probably the biggest third party administrator of FSA's/HSA's) asked for this to save clerical $$$$'s. You can be sure that in every way, shape and form the big fellows are accomodated.

darrelplant: . . That leaves aside the entire idea of whether there should be an American "empire".

"Empire" may have been used too loosely by me as it is not an "empire", but our country that I have been concerned about. Respect for our constitution, our rights and care for we the people are what I what I was referring to as having "faded". I do believe our standing in the world has faded, our financial well being has faded, our health and well being has faded, our jobs have faded, and so on.

I admit my antenna may be out ahead here, so may or may not be a slippery slope. I do not want to "eventually" be made to go to a Doctor for OTC items. What would be next - vitamins? It is none of the government's business anyway if I have sniffles, do they want to keep track of everything so they can raise your rates? Like I said, this could be an incremental step on us!

Just like the airport scene, got everyone standing in line for a few years first, and now? The Bodyscans! What might be the plans there, report that you have a small tumor and cut off your insurance rates or increase your monthly fees mandated of course to $5000.? What if the first step at the airport had been "Bodyscans"? - would the public have had a fit over it then? My point again that much is done in incremental ways. "Heat up the boiling water slowly". Sorry, if too much in a railing mood today.

Men fight for liberty and win it with hard knocks. Their children, brought up easy, let it slip away again, poor fools. And their grandchildren are once more slaves. ~D.H. Lawrence, Classical American Literature, 1922

Classic example of why it is so hard to cut government programs. Here's an instance where the government created a benefit (tax-free purchases of OTC drugs) that is primarily used by middle-and upper-middle class workers. Now, they're taking the benefit away, and there is outrage in the streets.

Personally, I think this is a good move. Every year, we have a little bit left in our FSA, and we run out and buy $40 or $50 of OTC meds just to make sure we don't lose the FSA funds. Now, we'll just scale back the FSA a bit and be more conservative in what income we shield from taxes.

An even better reform would be to allow people to roll-over the balance, or just refund it as taxable income. I'd be happy to pay taxes on the $50 rather than buy two pounds of Advil.

the American empire is fading
because the small percentage of people with HSAs (10 million or so) won't
be able to claim their OTC medicine as medical expenses on their taxes

Try to read my lips on this one, my literal friend: This stupid rule is emblematic of a bigger problem.

I hate every bit of this stupid, Rube-Goldberg system, which is primarily set up to enrich the processing companies who get to keep any money you don't pry out of their grasping fingers. In the days of computers, this system involves filling out printed forms with copies of receipts and what not -- what an absurd waste of time . . . that, oh by the way, makes you guess how much your medical expenses will be when you have to sign up for the withholding. Stupid, stupid, stupid.

Industry knows the spending on HSA-eligible items down to a gnats-ass margin -- take that amount and raise the standard deduction for everybody by that amount. Presto. No forms, no parasites in the processing industry, no waste, no having to guess. Makes too much sense I guess.

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