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WHAT IT MEANS AND WHY IT'S IMPORTANT — Self-care saves cents. It's really that simple. As a nation, if we're going to get serious about reversing escalating healthcare costs, it starts by gaining a better appreciation for the value nonprescription remedies can bring to the overall healthcare table. It starts by removing counterintuitive regulations that serve as a disincentive against employing self-care options as the first line of treatment. It starts with passing bills like the Medical Flexible Spending Account Improvement Act (S. 1404) and the Restoring Access to Medication Act (S. 1368/H.R. 2529). And it needs to start now.
(THE NEWS: Bill seeks to eliminate 'use it or lose it' provision in FSAs. For the full story, click here.)
The FSA Improvement Act removes one of the more significant disincentives to the adoption of money-saving tools by the average joe by allowing participants to withdraw funds — and pay taxes on those funds — at the end of the year. According to regulations today, FSA participants looking to manage and reduce their out-of-pocket healthcare costs make their best guess as to how much overall healthcare spending they'll be doing in the coming year. Those who overestimate that healthcare need and still have FSA funds at the end of a plan year forfeit that money as part of what has become known as the "use it or lose it" provision. That certainly places a damper on participation, because who wants to gamble with a tool that's supposed to reduce healthcare spending only to find that more dollars were lost than saved?
According to the bill’s sponsors, the original reason for adopting the “use it or lose it” provision was to prevent FSAs from being misused as tax shelters. With annual contributions capped at $2,500 beginning in 2013, that no longer will be necessary.
And the Restoring Access to Medication Act, introduced in mid-July, would remove the erroneous prescription requirement in order that nonprescription remedy costs be reimbursed by FSAs that was imposed by the 2010 Patient Protection and Affordable Care Act.
The good news in all of this: Congressional leaders seem to have a greater appreciation around the value-role over-the-counter medicines play as part of the bigger healthcare picture. But the proof is in the numbers. According to research released last year by London & Associates, patients scheduled 525 million appointments with their family doctors in 2008. At least 10% of those appointments would not have been necessary had the patient visited their local pharmacy for an OTC remedy before scheduling that appointment. Eliminating only half of those unnecessary appointments would save some $5.2 billion in overall healthcare costs each year and would give the doctors an additional half-hour per day on average, allowing them to focus on more urgent patient needs.
Saving money and improving the healthcare experience to boot, all thanks to increased utilization of OTCs and the healthcare professional behind the pharmacy counter? That's what really makes sense.