News in brief - July 25, 2011

Bill would repeal HSA prescription requirement

Bills introduced in the House and Senate on July 14 would repeal a provision in the national health reform law that requires holders of certain tax-exempt health accounts to get physician prescriptions before using account funding to purchase over-the-counter drugs.

The provision, which affects health savings accounts, flexible-spending arrangements and other tax-exempt accounts, went into effect in January. The Senate measure is sponsored by Sens. Ben Nelson (D, Neb.) and Pat Roberts (R, Kan.). The House bill is sponsored by Reps. Lynn Jenkins (R, Kan.) and Shelley Berkley (D, Nev.).

Nelson said the bills would end a misguided regulation that makes it harder for consumers to access medication and creates extra paperwork for doctors. "Flexible spending and other medical savings accounts allow consumers to have more control of their medical decisions and help them save money. The use of these consumer-driven accounts should be encouraged, not discouraged," Nelson said.

The provision was included in the health reform law as an attempt to curb unnecessary drug purchases. It was expected to save the federal government up to $5 billion over a decade.

Sen. Orrin Hatch (R, Utah) and Rep. Erik Paulsen (R, Minn.) unveiled legislation in late May that also would repeal the health reform law's prescription requirement for consumer-directed accounts.

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Lawmakers target unintended Medicaid eligibility

A measure introduced July 18 by Sen. Mike Enzi (R, Wyo.) would close a loophole in the national health system reform law that will allow about 3 million middle-class retirees to enroll in Medicaid when the program's eligibility expands in 2014.

The reform law excludes a large percentage of a person's income from the Medicaid eligibility calculation, in contrast with other federal programs. The loophole allows retirees who earn up to $58,840 annually, including their income from Social Security, to sign up for Medicaid. Enzi's bill would end that discrepancy, as would a companion bill introduced by Rep. Diane Black (R, Tenn.) in the House.

"As our leaders struggle to find common ground to address our nation's debt and spending, this proposal represents an area of savings where there is a rare opportunity for agreement on both sides of the aisle," Enzi said.

Closing the loophole would save the government about $13 billion over a decade. The loophole was revealed by Richard Foster, chief actuary for the Centers for Medicare & Medicaid Services, in a June article by The Associated Press.

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