Preventive care: US moves to label dietary supplements as medical expense

11 Aug 2020 --- Certain over-the-counter dietary supplement products could soon qualify as medical expenses in the US thanks to a newly introduced amendment to US legislation Internal Revenue Code (IRC) of 1986. This move would expand consumers’ access to dietary supplements in the short-term while simultaneously reducing healthcare costs in the long-term. The bill has been endorsed by the Natural Products Association (NPA), which regards the legislation as “a commonsense solution.”

“By modernizing the rules for savings and spending accounts, our bill would save taxpayer funds, increase consumer choice, and encourage people to invest in their health and wellness,” says US Senator Kevin Cramer (R-ND), a Senate Banking Committee member who introduced the bill. 

Senator Cramer’s bill would allow dietary supplements to be purchased with Health Savings Accounts, Flexible Savings Accounts and Health Reimbursement Arrangements. The amendment made would apply to expenses incurred after December 31, 2019. 

Dr. Daniel Fabricant, President and CEO of NPA, views this legislation amendment as a means of saving money in preventative health care costs, a lesson learned during the COVID-19 pandemic. 

Providing consumers affordable access to dietary supplements, such as iron pills, may help prevent nutrient deficiencies, such as anemia.“The COVID-19 pandemic has taught us that we need to be giving people more avenues and opportunities to save money in preventative health care costs. Too much of our focus in this country is on disease treatment rather than prevention. This simple change in our regulations promotes the proactive, preventive approach that we need to adopt if we wish to improve our nation’s health and manage healthcare costs,” he explains.

Deciphering the fine print
The amendment falls under IRC § 223(d)(2) Qualified Medical Expenses, proposing a new subparagraph (E) Dietary Supplement Product. “The term ‘qualified medical expenses’ means, with respect to an account beneficiary, amounts paid by such beneficiary for medical care of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise,” subparagraph § 223(d)(2) reads. 

Following the urgency of the pandemic in April, the nutrition industry had already made a bid to urge the Internal Revenue Service (IRS) to include dietary supplements as a “medical expense.” This came amid the US Department of Homeland Security (DHS) declaring health food stores and supplement manufacturers to be essential during the COVID-19 public health crisis – although some states have since ordered closures. 

“Not making the change perpetuates the disparity of reimbursing consumers for sick care, such as copays, prescription drugs, surgery, but not well-care. If we want healthcare to move toward prevention and away from curing ailments once people are sick, then programs like this one help move the country in that direction,” Steve Mister, President and CEO of the Council of Responsible Nutrition, told NutritionInsight at the time. 

Dr. Fabricant also expressed his support for this move, considering that “giving people more ways to save money to support their health is more important than ever.”

Edited by Anni Schleicher