For years now, part of my health coverage includes a flexible spending account (FSA). Since '03, over-the-counter drug purchases have been eligible for reimbursement. They still are, but because of the big health care bill that passed last year, a prescription from my doctor is now required in order to reimbursed for these expenses. It’s added a layer of hassle for me, and no doubt it’s also added a paperwork burden for my doctor’s office and for the people who manage my FSA.
So why are prescriptions being required now?
A cynical/conspiratorial theory is that the government wishes to make it such a pain in the ass to obtain reimbursement for OTC meds that frustrated patients will simply stop/lower their contributions to FSA’s, resulting in more taxable income - and therefore more tax revenue for the government.
An idealist theory is that this is an attempt to reduce fraud. The only kind of fraud I can think of is using one’s FSA to buy meds for a friend who doesn’t have an FSA. In theory, requiring a prescription should put an end to this - except the prescription process that was put into place at my doctor’s office doesn’t require an in-person visit to confirm whether you need the meds or not, so you can pretty much put whatever you want on the prescription request. Moreover, the amount of money involved here is trifling, and doesn’t seem to justify the storm of administrative work that is surely being required to manage this prescription program. Hypothetically speaking, If I buy a $5 bottle of Advil for a friend who doesn’t have an FSA, and he reimburses me for that $5, then the government loses out on, what, $1.25 in tax revenue?
So what’s the scoop? Why are OTC med prescriptions now being required for FSA reimbursement?