Monday, February 21, 2011

Health Saving Accounts and Over the Counter Medications for 2011

Effective January 1, 2011 you are not allowed to use HSA (Health Savings Account) FSA (Flexible Spending Account), MSA (Medical Savings Account) or HRA (Health Re-imbursement Arrangement) 
dollars for over the counter medications, unless they are prescribed.  In addition, for HSA and MSA's, the penalty tax if you do, goes from 10% to 20% and 15% to 20% respectively.  I have no idea, with the exception of raising more revenue, why the federal government would either disallow the OTC medications from being coverable or increasing the penalty.  In addition, how are they going to police this?  It would seem the increase of government employees needed to oversee this would negate any funds risen.  Anyway, if you have your physician prescribe your over-the-counter medication you are able to use your HSA and other named accounts to pay for it.  You do not need to have it filled by a pharmacist, just have the prescription on file.  Also, see if you can have the doc write it for a yearly supply.

Thursday, February 10, 2011

Florida Stopping Implementation of PPACA (Health Reform)

This is a follow-up to the previous post, District Court Judge Roger Vinson Just Said No, Too!  As a result of the recent federal court ruling, by U.S District Judge Roger Vinson, which declared PPACA or at least the Individual Mandate to be unconstitutional, Florida has stopped the implementation of the law.  Florida Governor Rick Scott said, "We're not going to spend a lot of time and money with regard to trying to get ready to implement that until we know exactly what is going to happen and I hope and believe that either it will be declared unconstitutional or it will be repealed.  Florida Insurance Commissioner Kevin McCarty stated, "PPACA, a major component of the federal Affordable Care Act package, is not now in effect in Florida."  In addition McCarty said that he told the director of HHS (Health and Human Services) Office of the Consumer Information and Oversight, that Florida would not be spending any of the funds it had been allocated to implement the insurance exchange program. 

Since there were 25 other states that also were part of the lawsuit, I wonder how many of them will make decisions, at the state level, to stop implementation until a final determination has been made?  Final determinations could take as long as two years. 

Tuesday, February 1, 2011

District Court Judge Roger Vinson Just Said No, Too!

On January 31, 2011 District Court Judge Roger Vinson declared the "Individual Mandate" of the PPACA (Health Reform) unconstitutional.  Vinson stated, "because the individual mandate is unconstitutional and not severable, the entire act must be void."  So the count is 2-2.  Judges in Michigan and Virginia, both democrat appointees, have ruled the Health Reform constitutional and Judges in Virginia and now Florida, both republican appointees,  have ruled, at least the individual mandate, as unconstitutional.  The Department of Justice is going to appeal the decision which was filed in March of 2010 by Florida but then 25 other states joined the suit.  The case will ultimately be heard in the Supreme Court which could take up to two years. 

As it stands now, in 2014, if someone doesn't purchase health insurance they will pay a fine of $95 per year or 1% of income whichever is greater and by 2017 amount goes to $695 or 2.5% of income to a maximum of 3X the individual penalty.  In addition, if you earn up to $14,000 you get coverage for free, up to $44,000 and it's subsidized.  Big freaking deal!  Since it's guaranteed issue, I'll take my chances and get coverage when I'm sick. 
Non-payers will receive a notice from the IRS.  If they don’t pay, the IRS will take it from their tax refund in the future.  If they continue to not pay the fine, they will not be subject to any criminal prosecution or penalties.  The secretary cannot file a notice of lien or file a levy on any property.  As stated in a previous post, this penalty has no teeth! 
So my question is what do the democrats do if the individual mandate is ultimately and finally deemed to be unconstitutional?  Do they allow each state to individually allow the reform?  If so, I'm thinking every sick person and their mother will flock to that state for guaranteed issue health care coverage with crushing claims that will make the coverage unaffordable for everyone else.  Or do they come back with a plan that doesn't create a penalty for not having coverage, but just increase taxes and give it to everyone?

Interestingly, some republicans and democrats are trying to come up with ideas that wouldn't require people to carry coverage but would encourage.  For example, people would be given a deadline to enroll and if that deadline is missed, they would have to satisfy long waiting periods.  Or people who apply late and are eligible for tax credits could be penalized by reducing their subsidies.  (sounds like a penalty to me)

Wouldn't it be great if healthy people paid less for coverage, sick people paid a bit more and for those who are truly unable to afford it, given help?  Instead of throwing all this money at bigger government to wrangle this thing, use it to help those who need it the most.