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house Bill H.R. 1270

Using Health Savings Accounts to Purchase Over the Counter Drugs

Argument in favor

People who contribute to Health Savings Accounts should be able to access that money to purchase the medication they need — including over-the-counter drugs. Requiring a prescription to purchase over-the-counter drugs with an HSA is burdensome and unfair.

Heather's Opinion
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06/22/2016
This money is set aside by the individual and employer for healthcare. Many healthcare preventative items can be purchased without a prescription, so I shouldn't need a prescription to raise the price of the item just so I can use my own money that is set aside for healthcare items.
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Mike's Opinion
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06/22/2016
We used to be able to and this was fantastic, I can't imagine how taking it away served any purpose.
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Stephanie's Opinion
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06/24/2016
It is already your money that you have chosen to set aside for health-related issues, and OTC drugs are still health-related. A prescription only requires further healthcare costs buy requiring a doctor's billable services to get it. The overall savings with not having to see a doctor for an easily obtained over-the-counter medication far outweighs the small issue of using tax-free dollars for this issue that the government insists on being involved in.
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Argument opposed

Patients with HSAs should only be able to avoid taxes when purchasing medically necessary drugs. If someone needs an over-the-counter drug, he or she can get a prescription. If the drug is not necessary, it shouldn’t warrant a tax discount.

Austin's Opinion
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06/22/2016
Shouldn't this be in the contract between the ins. co. and the customer? I don't see why the fed. govt. should have a say in this.
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JustinRichardson's Opinion
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06/22/2016
Tax free money should not be used for non prescribed potentially medically unnecessary drugs. It allows room for many problems
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Gateway's Opinion
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06/23/2016
This is a savings and should be spent on items or services needed to maintain good health.
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What is House Bill H.R. 1270?

The Restoring Access to Medication Act would repeal amendments made by the Affordable Care Act which prevent patients from using their Health Savings Accounts (HSA) or Flexible Spending Accounts to purchase over-the-counter drugs.

A Health Savings Account (HSA) is a special medical savings account that allows the holder to make tax-free contributions and withdrawals for certain medical expenses. HSAs must be paired with specific types of health insurance plans, and can be used for out-of-pocket medical, dental, and vision expenses.

Traditionally, patients were able to use money in their HSAs to purchase over-the-counter drugs and medication like allergy medicine, aspirin, and vitamins.

Under the Affordable Care Act, non-prescribed medicines or drugs are no longer considered qualifying medical expenses for tax-preferred purchase with an HSA. Patients can still use their HSAs to purchase prescription drugs; insulin; over-the-counter medical supplies like reading glasses, bandages, and crutches; and over-the-counter medications if they obtain a prescription.

People who use incorrectly use an HSA to purchase non-eligible items are subject to a 20 percent tax penalty.

Impact

People with HSAs or Flexible Spending Accounts; pharmacies; health insurance companies; and the IRS.

Cost of House Bill H.R. 1270

A CBO cost estimate is unavailable.

More Information

In Depth: At the end of 2014, nearly 14 million Americans held health savings accounts, 29 percent more than in 2013. By mid-2015, HSAs held more than $24 billion.

The American Osteopathic Association released a brief calling for the passage of this bill, arguing the current state of the law causes complications for both patients and doctors. Because patients with HSAs must obtain a prescription to receive tax discounts on over-the-counter drugs, patients’ and doctors’ time is wasted in appointments with the sole purpose of prescribing already readily available drugs. According to the brief, these appointments take physicians' "time, attention, and resources away from more serious cases."

Opponents of the bill argue that the current Affordable Care restrictions save money by ensuring that any tax-free purchases made with HSAs are actually necessary for the patients.


Of Note: Sponsoring Rep. Lynn Jenkins said in a statement:

“For many years, folks in Kansas and around the country have used Health Savings Accounts and Flexible Spending Accounts to help save and pay for over-the-counter medications. Unfortunately, the President’s healthcare law adds a burdensome layer of red tape that makes use of these accounts more expensive for consumers and fills doctors’ offices with needless visits.”


Media:


Summary by Katie Rose Quandt
(Photo Credit: Flickr user PinkMoose)

AKA

Restoring Access to Medication and Improving Health Savings Act of 2016

Official Title

To amend the Internal Revenue Code of 1986 to repeal the amendments made by the Patient Protection and Affordable Care Act which disqualify expenses for over-the-counter drugs under health savings accounts and health flexible spending arrangements.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house Passed July 6th, 2016
    Roll Call Vote 243 Yea / 164 Nay
      house Committees
      Health
      Committee on Ways and Means
    IntroducedMarch 4th, 2015

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    This money is set aside by the individual and employer for healthcare. Many healthcare preventative items can be purchased without a prescription, so I shouldn't need a prescription to raise the price of the item just so I can use my own money that is set aside for healthcare items.
    Like (29)
    Follow
    Share
    Shouldn't this be in the contract between the ins. co. and the customer? I don't see why the fed. govt. should have a say in this.
    Like (15)
    Follow
    Share
    We used to be able to and this was fantastic, I can't imagine how taking it away served any purpose.
    Like (12)
    Follow
    Share
    It is already your money that you have chosen to set aside for health-related issues, and OTC drugs are still health-related. A prescription only requires further healthcare costs buy requiring a doctor's billable services to get it. The overall savings with not having to see a doctor for an easily obtained over-the-counter medication far outweighs the small issue of using tax-free dollars for this issue that the government insists on being involved in.
    Like (8)
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    Tax free money should not be used for non prescribed potentially medically unnecessary drugs. It allows room for many problems
    Like (5)
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    If it reduces cost of medical bills in general to allow people to access over the counter medicines with HSA then it should be possible to do so. Patients should be able to spend how they see fit.
    Like (4)
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    I don't see any reason why the government should be preventing people from using health savings accounts on over the counter drugs.
    Like (3)
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    Sometimes doctors won't prescribe medications if they're available over the counter, or insurances won't cover them!
    Like (3)
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    This makes sense. I used to use my HSA to purchase aleve, vitamins and other over the counter meds. It's seems like a waste of my time & my doctors to ask for prescriptions for these commonly used items.
    Like (3)
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    This is a savings and should be spent on items or services needed to maintain good health.
    Like (3)
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    They worked for it!
    Like (3)
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    Many of the drugs my doctor has recommended to me have been supplements, anti-inflammatories, or the like. I need these just as often as prescribed medicine and believe my insurance coverage should apply to these.
    Like (3)
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    My medication, my money, my choice.
    Like (3)
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    Requiring a doctor's approval for everything just adds more drain on their already overly demanded time.
    Like (2)
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    Access matters.
    Like (2)
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    If it is part of healthcare you should be able to use your hsa to pay for over the counter drugs.
    Like (2)
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    Although I believe it should be up to the companies to decide what sort of plan they get for their employees, there should be an option for companies to choose to add over-the-counter coverage on pretax medical expense plans.
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    What is the use of healthcare if I can't use it for medicine??
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    Sometimes OTC drugs are the best treatment for a medical condition so we should be able to access our healthcare dollars to pay for them.
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    Sounds like a plan. But the Devils in the details. Clarify OTC medication will certainly clarify those devilish details.
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