Ways and Means panel mulls ACA coverage for OTC medicines
The House Ways and Means Oversight Subcommittee on April 25 considered a billion provision sic. 9003) in the Patient Protection and Affordable Care Act that prohibits using certain tax-favored spending plans to reimburse taxpayers for the cost of over-the-counter (OTC) medicines. GOP lawmakers said requiring taxpayers to visit a doctor is tantamount to a tax increase that would clog physicians’ offices, thereby reducing health care access for millions of American families. The provision, which was intended to improve tax compliance and reform tax expenditures, was first suggested by the Joint Committee on Taxation in 2005, subcommittee Democrats countered. The provision took effect on January 1, 2011.
Charles Boustany (R-La) said, in his opening statement, that the Act “required that consumers using tax-advantaged plans must first obtain a doctor’s prescription in order to use their tax-preferred account funds to purchase over-the-counter medication. This provision alone is a $5 billion tax increase on the American people.”
Scott Millivolt, president of the Consumer Healthcare Products Association, a trade group, testified that using flexible spending arrangements and health savings accounts to pay for OTC. medicines could eliminate about 20 million office visits each year and save about $5 billion in health care costs. Millivolt said there is no medical justification for requiring an office visit before buying OTC medicines with a spending plan.
However, Paul N. Van De Water, a Senior Fellow of the Center on Budget and Policy Priorities, said the use of tax-advantaged accounts encourages the overconsumption of health care. The accounts make taxpayers less price-sensitive and reduce the effects of the cost-sharing requirement in controlling utilization, he testified.