OTC Drugs Should Qualify as Medical Expense for Tax Purposes
Utah Sen. Hatch introduced a bill in Congress that would repeal the provision of the Affordable Care Act that removed OTC medications as eligible medical expenses under IRS code 213(d). In addition, the bill would remove the use-it-or-lose-it provision.
Consumers have long used over-the-counter (OTC) remedies to treat minor symptoms. Increasingly, traditional self-treatments have been joined by new, potent medications that the U.S. Food and Drug Administration (FDA) has moved from prescription-only to OTC status. Consumers benefit from self-administered OTC medications with lower prices and easier access. Thus it was shortsighted for Congress to declassify OTC medications as Eligible Medical Expenses under IRS code 213(d).
The amount of tax revenue gained by prohibiting the purchase of OTC medications with pre-tax dollars is estimated at no more than $5 billion from 2011 through 2019. However, the cost to patients and insurers could be far higher. OTC medications originate from the safest prescription medications — those judged safe enough to self-administer without a doctor’s prescription. In addition, many Americans will substitute more costly prescription medications that are reimbursed by their health plan pushing premiums up. At the very least Americans will pay higher prices. The discount for using an HSA, FSA or HRA to pay for OTC medications can approach 40% to 45% when federal and state income tax, and payroll tax is factored in.
Talk about misaligned incentives. Have they considered the value of OTC medicines as methods of long-term preventative care.
Agree with your point totally.
Ahh, the truth comes out. But no surprise once you stop to think about it.
Good Post Devon, OTC’s can be very valuable to front line prevention.
The whole idea of even having this debate is arbitrary. There is no difference between an OTC and prescription meds except that one is considered “unsafe” for consumers to use on their own (nevermind the health risks of excess consumption of virtually all OTC drugs).
Getting rid of the Use-It-Or-Lose-It provision seems like a no-brainer.
For a country that is suffering from high medical expenditure, reducing the incentive to use OTC medications would seem counterproductive and rather short-sighted.
Janet GaudetHello Brad: I just watched your video on htaelh care and I wish you the best of luck for tomorrow. We’ve got to get a change of government. Our candidate is Neila Auld. We feel that Neila Auld would be a capable representative for our district. This present government under Robert Ghiz is the worst government in the history of P.E.I. I’m 75, have seen a lot of governments come and go, and I have never seen a more corrupt, incompetent, sleazy, power hungry government ever. Ghiz is no leader, never will be. When Valerie Docherty came campaigning first time she ran I told her I couldn’t support Ghiz, I didn’t like him. Well I dislike him even more now, have absolutely no respect for him or for his MLAs. Carolyn Bertram as Minister of Health is a complete disaster. As seniors, my husband and I are extremely worried about the deterioration of htaelh care in P.E.I. I worked in htaelh care most of my life as an L.N.A. in hospital, nursing, home care & support, and have volunteered for Island Hospice. When I nursed, the emphasis was on the patient and their care, on bedside nursing, now that’s all changed. This big addition at QEH isn’t going to make things better because there won’t be enough staff to cover it. I was told that by a nurse from C.C.U. at QEH when my husband was a patient in that unit last summer. Our other main concern is P.N.P. scandal. We’d like the truth brought out about that, who exactly got the money and how much did they get. I think that the people in power in P.E.I., not just the politicians, don’t want the truth to come out and will do everything they can to stop Olive getting in as Premier. These are the people who are the big frogs in the little puddle called P.E.I.. I hope to see you elected tomorrow as I think you would be an excellent selection for M.L.A. to represent your district. If we don’t get a change in government, I dread what’s going to happen to P.E.I. Right now I feel as if I’m on a ship, the S.S.P.E.I., captain & crew don’t know what they’re doing, there are no lifeboats or life preservers, rudder is broken & anchor is gone, and we’re heading to the rocks. I have never felt this way before about P.E.I. and I am very worried.Sincerely,Janet GaudetSt. Catherines