• Shocked, shocked I am!

    Oh, WSJ. You almost had me. You started the story with an interesting premise and actual reporting, but then you went back to form. Let’s start with the good.

    One of the provisions of the PPACA was to change the way flexible-spending accounts work. More than 30 million Americans have accounts like these, where they can set aside pre-tax dollars to spend for things like child care or medical spending. I have one of these. It’s great – my wife and I sit down every November and estimate how much money we might spend on medical stuff.  We can then use that money over the course of the year. If we don’t spend it, we lose it; but if we do, we don’t have to pay taxes on it.

    It’s not hard to spend it, though, because so much qualifies. Co-pays and deductibles, for instance. But also eyeglasses and vision stuff. My oldest son’s braces. And – up until now – over-the-counter medications. But as part of PPACA, this part was removed:

    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.

    “The entire flexible-spending account thing is a waste of our taxpayer dollars,” says Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology and a former paid consultant on the health law to the Department of Health and Human Services. “If you’re going to scale it back, this is a natural place to start.” (Another part of the law limits the amount consumers can save in flexible-spending accounts to $2,500 a year, starting in 2013.)

    Peeling back tax breaks for health plans was on the table in 2009 when lawmakers began drafting the health overhaul. Inside the Senate Finance Committee, aides to three Democratic and three Republican senators hashed out the blueprint for what ultimately became the final bill.

    The thing is, people are crafty. So we’re now getting this:

    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.

    This is what is known as a forseeable consequence. If you (meaning politicians) remove something that people like, they will naturally attempt to find another way to get it. People liked paying for OTC meds with their flex-spending accounts. When you made that impossible without getting a prescription, they naturally tried to get prescriptions. I’m not endorsing that. If we want the law enforced, doctors should refuse. But you (1) can’t really blame people for trying and (2) you can’t really be surprised.

    And (2) is where the WSJ lost me. If this article had appeared in the opinion section, the rest of it wouldn’t have made me roll my eyes. But it’s in the business section, and so I would like to believe that reporters there are well informed. Yet we get this:

    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.

    To the handful of congressional aides who came up with the idea to limit tax breaks on over-the-counter drugs, it was supposed to be a minor tweak to raise revenue and to discourage wasteful spending on health products.

    Wow. It’s as if this never happened. Look, many people thought the high-risk pools would fail. Implementing the regulations for children before the mandate leading to insurance companies balking was completely predictable. The potential anti-trust issues of accountable care organizations were forseen. And this result, while needing a fix, is not nearly as shocking as you might think from this article.

    If reporters are going to inform their readers about issues with PPACA, that’s fine. In fact it’s laudable. But professing “surprise” over such things makes you look, well, uninformed. May I suggest reading our blog? We might not have made the Time “top 25 financial blogs”, but we like to think that we do a pretty good job on health policy.

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    • Great Read, as always.

    • Good thing that horse is still dead.

      “…I sit down every November and estimate how much money we might spend on medical stuff. We can then use that money over the course of the year.”

      I don’t do that but if I did it would be easy: close to 0.

      (Off the shelf things like aspirin and cold medicine are not normally covered.)

      It’s still amazing to me after all these years how so many people can be so opposed to a single payer system.