Skip to comments.Changes to HSAs are nothing to sneeze at
Posted on 07/09/2010 11:08:36 AM PDT by HushTX
The economic benefits Health Savings Accounts (HSA) have on society as a whole are very complicated and outside the scope of this blog. What really matters to the average person is that you can have part of your paycheck deposited into your HSA without it being taxed. That means more money for medical expenses, a reliable and secure means of covering medical treatments, and the confidence that comes with such stability.
Many people who use HSAs do so in order to save up for future medical procedures. It is not uncommon for a family to put money into an HSA to help cover having a baby, or for someone with bad eyesight to save up for lasik surgery. People who suffer from allergies can utilize the HSA to set aside money needed to buy allergy medicine. The savings plan can even be applied to purchases such as Neosporin or flu medicines.
Thats all about to change.
Due to the passage of the much contested health care reform bill, HSAs will begin to operate differently. The changes mandated by this legislation will require doctor approval to utilize the HSA for a number of common over-the-counter (OTC) medications. In other words, the government thinks we cannot decide for ourselves when we need allergy medicine or when a cut is bad enough to require treatment. You will no longer be able to use your HSA to pay for things such as Tylenol Cold, Thermaflu, Zyrtec, Prilosec OTC, Neosporin, Aleve. Not unless you go see a doctor and pay a ridiculous fee for them to write a prescription for something normally sold over the counter. Instead of paying $19.97 for a 24 count package of Zyrtec because your allergies are acting up, you will have to make an appointment to see your doctor. Then starts the process we all know so well. You sit for what seems like a lifetime until someone finally calls you back to sit in an examination room. You wait some more. Finally, a doctor comes in, sees youre sniffling and sneezing and he writes a prescription. This could cost $15 or more, depending on your co-pay. Only now can you go to the store and buy a twenty dollar package of allergy medicine.
Many people are trying to defend this change by saying you can simply go purchase the medicine out of pocket without messing with the process. That is absolutely correct, but that doesnt change the fact that one of the major benefits of the HSA system is being ruined by government interference. Remember, the money deposited into the HSA is not subject to normal income taxation. That is a major reason many people use the HSA in such a manner.
The most common argument to date is that the money is the governments, so the government should be able to decide how it is used.
The money is NOT the governments. The money is YOURS. The money in your HSA is coming out of your paycheck, was paid for work you did, and it belongs to you. True, the money is not subject to taxes, but the entire reason such a benefit was instituted was to encourage responsible use of personal finances and to reduce the dependency on the government for medical care.
Now the government is telling you how to use your money. You are no longer able to decide for yourself if a cut on your leg is bad enough to need Neosporin. You cant decide if your allergies are bad enough that you need some Benadryl. You have to pay a doctor to decide that for you.
Its always interesting to speculate on the long term ramifications of such developments. What do you suppose this is going to mean for the insurance industry? Many people fear that the health care reform bill will eventually lead to greater dependence on the government through some sort of government run insurance provider. Its easy to see where that argument is headed. But what about the idea of requiring a prescription for an over-the-counter medicine? For now you only need a prescription if you want to use your HSA, but will it stay that way? Who can say that down the road we wont see common OTC medicines moving behind the counter? Imagine all the common OTC medicines being moved behind the counter while at the same time a government insurance provider edges out private sector insurance providers.
Its hard to say if thats the long term effect. We can hope its not, but with the way the U.S. government is being run it would not be a great surprise to some of us. Some people, however, choose to see no evil and will never know what hit them. Still, long term is long term, and there is a more immediate concern. The changes to HSAs take effect on January 1, 2011. These changes are across the board, meaning every HSA in the country is subject to this federal legislation.
Contact your Human Resources department and demand the facts about your HSA and the changes being made. After reviewing the changes you have to make a choice. Are you content with the government having that much control over your health and your finances?
Does anybody know if contacts and glasses are still eligible?
According to the document we received from my wife’s employer (State of Texas), glasses and contacts are still eligible.
Don't worry, it will all be decided by the Health Czar!
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