The National Association of Manufacturers has signed on with a letter to Congress from members of Health Choices Coalition, urging legislators to overturn the ban on use of employees’ Flexible Spending Accounts for over-the-counter drugs. OTC drugs are effective and FSAs are effective, providing an important measure of consumer control over health-care spending, yet last year’s health care law limited the accounts.

The Consumer Healthcare Products Association issued a release on the issue earlier this week. Excerpt:

“This issue is about empowering millions of American consumers to cost-effectively manage their families’ healthcare needs,” said CHPA Vice President of Government Affairs Bill Head. “The availability of OTC medicines through an employer-sponsored FSA provides valuable cost-savings to consumers, increases worker productivity, and encourages smart healthcare decisions by both employers and employees — all of which are consistent with the goals of healthcare reform.”

Prior to January, OTC medicines were eligible for reimbursement under FSAs and other tax-preferred savings accounts. An estimated 19 million working American families purchased these cost-effective medications through their FSAs. (continue reading…)

One year ago today, President Obama signed the Patient Protection and Affordable Care Act (PPACA), the great federal restructuring of U.S. health care. The law’s value in protecting patients is suspect, and it’s doing little to make health care affordable. So, after a year of implementation what has been the real effect?

PPACA: Neither Protective, Nor Affordable

We know that the promise of being able to keep our health plan if we like it was an empty one, and even the Administration’s own actuary admits this fact. When asked during a hearing in the House Budget Committee whether the health care law really allows people to keep the plans they like, Rick Foster stated that claim was “not true in all cases.”

We also know the bulk of the funding for the new entitlement program is based on fuzzy math at best and outright deception at worst. In a stunning admission before the House Energy and Commerce Committee, the Secretary of Health and Human Services admitted the Administration is counting reductions in Medicare spending as a credit to extending the solvency of the program while also using the same funds to “pay for” a large portion of the expected costs of PPACA. This double-counting allowed the Administration to claim the legislation would save the nation more than $100 billion over the next 10 years — a statement with as much veracity as the promise our health plans wouldn’t change.

As the law enters its second year of implementation, the National Association of Manufacturers will be watching several issues sure to emerge in 2011: the essential benefits package and accountable care organizations (ACO). The essential benefits package defines for all Americans what coverage must purchase in order to avoid penalties under the law. It’s easy to predict how this will turn out: All single men will have to buy a plan that covers pre-natal and post-natal care and all single women will have to have a policy that covers prostate cancer. This is not to say these aren’t important things to cover, but the inequity is clear.

What’s also clear is how the process of determining what is an essential benefit will be manipulated by well-meaning interest groups that will gauge their importance and influence on policymakers based on whether their particular disease category is included as an essential benefit. Special-interest coverage is hardly a strategy for controlling health care costs.

While accountable care organizations (ACOs) seem to be an attractive idea in some health care policy circles, there are some (this author included) who believe the consolidation and integration of hospitals and physician practices could do irreparable harm to competition in the marketplace. ACOs may work fine in a single-payer system like Medicare, but it could wreak havoc on negotiations for payment rates and the establishment of networks in a private market which depends on competition in order to arrive at a mutually agreed upon price for services. In small to medium-sized communities, this consolidation could lead to oligopolies or monopolies in health care services. Such an outcome would raise prices and make care less affordable.

Many proponents believed, and continue to believe, Americans will warm to the law once they see all the great things and reap all the rewards of the centralized command-and-control this law will bestow upon us. The results so far leave us cold. (continue reading…)

IN: Favors for organized labor. Kevin Troutman of Fisher & Phillips writes in a Houston Chronicle op-ed, “Goodies for labor tucked away in health bill,” including: “[Another] provision would establish lucrative state training partnerships that contain little or no opportunities for non-union employee organizations. Provisions in Senate proposals would exempt union-negotiated health care plans from taxes on “Cadillac” health plans.

OUT: Any serious tort reform. From Point of Law, “The Senate health care bill dodges liability reform,” a report that there’s only a “sense of the Senate” language suggesting state demonstration projects. But not too strong of a suggestion.

IN: The Bo-tax, a 5 percent excise tax on cosmetic surgery. See Los Angles Times, “Paying for healthcare reform with a ‘botax’”

OUT: Support for consumer-oriented health care reforms, such as Flexible Spending Accounts (FSAs). From Joe Jackson, chairman of Save Flexible Spending Plans and CEO of WageWorks Inc., a news release, “Senate Health Bill Would Significantly Curtail Flexible Spending Accounts.”

IN: New taxes and taxes increases. From the Joint Tax Committee, via Heritage.org, “The Senate Health Bill: Higher Taxes from Harry Reid“:

Reid Taxes as calculated by the Joint Tax Committee:

1. 40% Excise tax on High Value plans such as $8,500 for Individual and $23,000 for a couple. $149.1 billion in new taxes over the next ten years.
2. 0.5% Hike in Medicare Payroll Tax Hike, for single earners over $200,000 and joint earners over $250,000. $53.8 billion in new taxes over the next ten years.
3. Changes to Health Savings Accounts, Archer Medical Spending Accounts and Health Flexible Spending Accounts and Health Reimbursement Arrangements, $5 billion in new taxes.
4. Cap Flexible Spending Accounts at $2500 in cafeteria plans from the current status of unlimited FSA, $14.6 billion.
5. Increase Penalty for early non-qualified Health Savings Accounts Withdrawals from 10 to 20 Percent, $1.3 Billion.
6. Tax on Branded Drugs: manufacturers and importers of branded drugs that will cost taxpayers $22.2 billion.

(continue reading…)