Unintended Consequences of Health Care Reform

With a law as complex as the Patient Protection and Affordable Care Act (PPACA), unintended consequences are always a concern.  Last week The Wall Street Journal reported that the physician community is witnessing the emergence of a significant unintended consequence — since tax-advantaged flexible spending accounts can no longer be used to pay for over-the-counter medications without a prescription, under the law, many patients are now visiting their doctors expressly for the purpose of getting new prescriptions for the OTC medications.

The change in the law was meant to discourage wasteful spending on some health products and raise revenue. Instead, critics say the provision is driving up health care costs. Unintended consequences of the health care reform law is an area of focus for all insurance companies, and will continue to urge flexibility in the implementation process to help address potential unintended consequences.

People who have High Deductible Health Plans in conjunction with a Health Savings Account, are acting similarly.  They can no longer deduct their over-the-counter medications as a “qualified medical expense”.  Consequently, they too are getting prescriptions for OTC medications.  However, because the insured pays for his own drugs, at a discount, the effect is minimized.

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