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Sandy Chung is grappling with a new kind of request at her pediatrics office in Fairfax, Va.: prescriptions for aspirin and diaper rash cream.

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 a flexible spending account 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 Chung, who rejected much of a 10-item request from a mother of four that included pain relievers and children's cold medicine.

Unintended side effects

Though the new rules on over-the-counter drugs amount to a small part of the massive overhaul of the health care system, the unintended side effects show how difficult it can be to predict how such game-changing legislation will play out in the real world.

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 15,000 different everyday products for customers paying with certain debit cards.

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.
  • 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.

Squeezing out tax savings

About 33 million Americans are in families that have flexible spending accounts, which are funded through payroll deductions and allow consumers to pay for health expenses with tax-free dollars.

The change also applies to health savings accounts designed for consumers in insurance plans with high deductibles. If fewer people use these accounts to buy drugs, the government gets more tax revenue. Retail sales of over-the-counter medicines amounted to about $17 billion in 2010, not counting sales at Wal-Mart, according to Nielsen Co.

What the law's writers didn't anticipate was the determination of some people to squeeze every last drop of tax savings from their accounts.

When Dianna Greer of San Diego and her son came down with a cold, she wanted a $13 bottle of NyQuil and daytime cold medicine -- and she wanted to pay for it by tapping the $5,000 in her flexible spending account.

Greer says her doctor wouldn't write prescriptions without an office visit, so she went without the drugs. Later, she got the prescriptions from a doctor at the emergency room, where she was diagnosed with pneumonia.

"It feels like you're begging for something when it's your money," she says.

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. Republicans in the House voted this year to repeal the law, though the measure died in the Senate. Opponents are trying to get it struck down in the courts, a fight that is likely to last until at least next year.

Target for change

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, the secretary of Health and Human Services, said: "I'd take a look at it."

A spokeswoman for the Treasury Department, which oversees tax policy, says the provision "enjoyed bipartisan support in Congress, but, as the president said, anything can be improved, and we are always willing to listen to ideas about how to make health care better and more affordable."

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.