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The Laws of Unintended Consequences, or Whose Money is it Anyway?

There are provisions in the health care bill which paradoxically, and perhaps predictably increase the cost of Rxes and add additional burdens to the doctor. 

Patients are demanding doctors' orders for over-the-counter products because of a provision in the health-care overhaul that slipped past nearly everyone's radar. It says people who want a tax break to buy such items with what's known as flexible-spending accounts need to get a prescription first.


The result is that Americans are visiting their doctors before making a trip to the drugstore, hoping their physician will help them out by writing the prescription. The new requirements create not only an added burden for doctors, but also new complications for retailers and pharmacies.

"It drives up the cost of health care as opposed to reducing it," says Dr.Chung, who rejected much of a 10-item request from a mother of four that included pain relievers and children's cold medicine.

Some doctors, irked by the paperwork and worried about lawsuits, are balking at writing the new prescriptions. Pharmacists and retailers say the changes mean they have to apply a personalized label on some 15,000 different everyday products for customers paying with certain debit cards.

The Unintended Consequences of Hasty and Poorly Thought out Legislation

Retailers and pharmacies, meanwhile, say another aspect of the change caught them flat-footed. Many flexible-spending accounts come with a debit card, making it easy for consumers to draw down the money in the accounts when they shop at a pharmacy. But under the original IRS guidance, people couldn't use those cards for the prescribed over-the-counter medications.

An industry group representing Wal-Mart, CVS Caremark Corp., Visa Inc. and other large corporations warned that could temporarily halt use of the debit cards for any pharmacy purchase. The IRS eventually decided the cards could be used—as long as the pharmacist labels and processes the over-the-counter item exactly like a prescription.

That had another unintended effect. Thousands of over-the-counter products now must pass behind the pharmacist's counter when the customer pays with the special debit card.

Doctors are also concerned about malpractice lawsuits, since a prescription potentially puts them on the hook for any problems a patient suffers from over-the-counter drugs.

Some malpractice insurers are urging doctors not to write any prescription without seeing the patient in person, says Lawrence Smarr, president of the Physician Insurers Association of America, which represents malpractice insurance providers.

The over-the-counter provision isn't the only part of the health-care law that has defied expectations.

Health-policy experts predicted that new insurance pools for high-risk patients would attract so many expensive enrollees that funding would be quickly exhausted. In fact, enrollment is running at just 6% of expectations, partly because of high premiums.

A provision preventing insurers from denying coverage to children with pre-existing health conditions prompted insurers in dozens of states to stop selling child-only policies altogether.

And a piece of the law designed to centralize patient care by encouraging health-care providers to collaborate is running into antitrust concerns from regulators.

Much of the health law, which passed last year despite overwhelming opposition by Republicans, doesn't take effect until 2014. The nonpartisan Congressional Budget Office has projected that an additional 32 million Americans will get insurance, and the law has already extended tax credits to small businesses for buying insurance and allowed many parents to keep their children on their health plan until their 26th birthday.

But opponents say it costs too much and gives the federal government too much control over health care.

As that larger battle plays out, the over-the-counter provision is emerging as a top target for change. Republicans in both the House and Senate have introduced legislation to repeal it and return to the old system. The largest chain drugstore lobbying group is backing the effort, arguing that the new rules are inefficient and limit access to the medicines.

Asked whether she would support such legislation, Kathleen Sebelius, secretary of Health and Human Services, said: "I'd take a look at it."

Tax breaks for over-the-counter drugs date to 2003, as popular drugs like the allergy medicine Claritin began switching to over-the-counter status. The Internal Revenue Service loosened the rules on flexible-spending accounts so consumers could use them to buy thousands of nonprescription medications. The tax-free dollars can also go for insurance co-payments, eyeglasses and other out-of-pocket health costs.

Critics say the accounts encourage overconsumption of medical services. Since consumers typically must forfeit unused funds by year's end, they often ended up scrambling in December to drain their funds by loading up on aspirin, antacid and the like.

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