An OTC card is an over-the-counter allowance issued by a Medicare Advantage plan, not by Medicare. Original Medicare (Part A and Part B) pays nothing toward over-the-counter products, and Part D is barred by statute from covering non-prescription drugs, so the only route to an OTC allowance is enrolling in a Medicare Advantage plan that chose to offer one. KFF found that 66% of individual Medicare Advantage plans included an allowance for over-the-counter items for 2026, down from 73% in 2025, and 94% of Special Needs Plans included one. CMS does not set the dollar amount. Each plan picks it.
If you already have a card and want your balance
A meaningful share of people searching "otc card" are not shopping for a plan. They want to know how much is left on the card they already have. There is no single national website for that, because the card is issued by your insurer or by a benefits vendor that insurer hired, not by Medicare. Four places that work regardless of which plan you have:
- The phone number printed on the back of the card. This reaches the benefits administrator that holds the balance, which is usually faster than your plan's main line.
- Your plan's member portal or mobile app. Log in with the member ID on your insurance card. Most portals show the current balance, the period it expires, and the item catalog in one place.
- The OTC catalog your plan mailed you. It lists eligible items and the order line, and it is the only authoritative list of what your specific plan covers.
- The member services number on your Medicare Advantage ID card. Say "over-the-counter benefit balance" when the menu asks what you need.
Two things to know before you call. First, most allowances do not roll over. Plans commonly load credit monthly or quarterly (January 1, April 1, July 1, October 1 on a quarterly schedule) and whatever is unspent at the end of the period is gone. Second, starting with the 2027 plan year, CMS requires these cards to be limited to the specific plan year, so a balance left on December 31 does not travel into January.
One more change worth planning around: Medicare Advantage plans used to be required to mail you a mid-year notice between June 30 and July 31 listing supplemental benefits you had not used. CMS rescinded that requirement in the Contract Year 2027 final rule published April 2, 2026. From 2027 forward, nobody is obligated to remind you about an unspent allowance. Checking it yourself is the whole system now.
What an OTC card actually is
The formal name in Medicare rules is a supplemental benefit. Medicare Advantage plans are paid a fixed amount per enrollee and may use part of it to offer benefits Original Medicare does not cover. An over-the-counter allowance is one of those. So are dental, vision, hearing, fitness memberships and transportation.
That has three consequences people get wrong:
- It is not a government benefit. Medicare does not mail OTC cards or "flex cards" to beneficiaries. Any ad or phone call offering a "free government flex card for all seniors," or naming a large dollar figure added to your Social Security, is misleading at best. Nobody legitimate needs your Medicare number to "activate" an allowance you already have.
- There is no standard amount and no standard item list. Two plans in the same county can offer different credits and different catalogs.
- It can shrink or disappear at renewal. The allowance is a plan design choice, so it is re-set every year in the Annual Notice of Change your plan mails by September 30.
| Coverage you have | Pays for over-the-counter items? |
|---|
| Original Medicare, Part A and Part B | No |
| Medicare Part D drug plan | No. Non-prescription drugs are excluded by statute (Social Security Act section 1860D-2(e)(2)(A)) |
| Medicare Advantage (Part C) | Only if that specific plan offers an OTC allowance |
| Medicare Advantage Special Needs Plan (D-SNP, C-SNP, I-SNP) | Usually. 94% of SNPs offered an allowance for 2026 |
| Medigap (Medicare Supplement) | No. Medigap pays Original Medicare cost sharing, not retail products |
| Medicaid, if you also have it | Some state Medicaid programs cover certain OTC products with a prescription. Rules vary by state |
If you qualify for both Medicare and Medicaid, read dual eligible Medicare and Medicaid benefits next, because D-SNPs are where the largest allowances generally sit.
What the allowance typically buys, and what it will not
CMS requires a standard supplemental OTC benefit to be health related. That is the line that decides most declines at the register. Plans publish their own catalogs, so treat the table below as the common pattern rather than a guarantee for your plan.
| Usually eligible | Usually not eligible |
|---|
| Pain relievers, aspirin, fever reducers | Prescription drugs (those run through Part D) |
| Cold, cough, flu and allergy medicine | Groceries and general food, unless your plan has a separate food benefit |
| Antacids, laxatives, digestive health products | Tobacco, alcohol, lottery tickets |
| Bandages, gauze, antiseptics, first aid supplies | Paper towels, tissues, toilet paper, cleaning products |
| Vitamins and mineral supplements | Cosmetics, shampoo, conditioner, hair dye, deodorant, shaving supplies |
| Toothpaste, denture adhesive and cleaners, floss | Breath mints, gum, teeth whitening kits |
| Reading glasses, eye drops, ear care products | Pet food and pet supplies, outside a qualifying SSBCI benefit |
| Diabetic socks, test supplies a plan lists as OTC | Gift cards, electronics, household goods |
| Incontinence pads and briefs | Anything your plan's catalog does not list, whatever a store sign says |
| Thermometers, blood pressure monitors, pill organizers | |
| Compression stockings, braces and supports | |
| Sunscreen, where the plan lists it | |
Hearing aids are a separate question with its own rules, and a plan's hearing benefit is not the same as its OTC allowance. See Medicare hearing aid coverage for how the device side works.
The register gets stricter in 2027
In the Contract Year 2027 Medicare Advantage and Part D final rule, CMS finalized a requirement that supplemental benefit debit cards be electronically linked to plan-covered items and services through a real-time identification mechanism to verify eligibility of plan-covered benefits (products) at the point of sale, and that the cards be limited to the specific plan year.
In plain terms, the card checks your cart item by item and declines what your plan does not cover, rather than approving a whole purchase at a participating store. If you have been accustomed to the card clearing a mixed basket, expect that to change. Plans are expected to give clear instructions on card use, offer support when a transaction fails, and keep a path to reimbursement when a covered item gets wrongly declined.
Practical habits that avoid the problem:
- Split the transaction. Ring up OTC-eligible items separately from groceries and household goods.
- Order from the plan's catalog or mail-order line when you are unsure. Those orders are pre-screened against your own plan's list.
- Keep the receipt for anything declined that your catalog does list, then call member services and ask for reimbursement.
Food, utility and "flex" credits are a different benefit
Allowances for groceries, utility bills, rent help or pet supplies are usually not the standard OTC benefit. They fall under Special Supplemental Benefits for the Chronically Ill (SSBCI), which plans may offer only to enrollees who meet CMS's chronically ill definition: one or more comorbid and medically complex chronic conditions that are life threatening or significantly limit overall health or function, a high risk of hospitalization or other adverse health outcomes, and a need for intensive care coordination.
Having diabetes or COPD does not by itself make you chronically ill under that test. All three parts have to be met. Unlike dental or vision, SSBCI does not have to be offered uniformly to everyone in a plan, which is why two neighbors in the same plan can have different access to a grocery credit. For 2027, CMS is requiring plans to publicly post their plan-developed SSBCI eligibility criteria, which makes it possible to read the rules before you enroll instead of after. The same rule clarified that cannabis products illegal under state or federal law are never allowable as SSBCI.
If an ad quotes a large monthly grocery allowance without saying who qualifies, the number is almost certainly an SSBCI benefit for a narrow group of enrollees, not something everyone in the plan receives.
The 2027 Medicare Advantage picture
CMS published its 2027 projections on September 28, 2026, alongside the plan landscape used by Medicare Plan Finder.
| Figure | 2026 | 2027 |
|---|
| Medicare Advantage plans nationwide | 5,553 | About 5,532 |
| Projected average monthly MA premium (weighted) | $14.37 | $12.00 |
| Projected MA enrollment | Not stated | About 34 million, roughly 47.4% of Medicare |
| Part D out-of-pocket cap | $2,100 | $2,400 |
| Beneficiaries with 10 or more MA plan choices | Not stated | 97% |
CMS says supplemental benefit offerings "including hearing, dental, and vision benefits, are expected to remain stable" for 2027. OTC is the softer category. KFF's year-over-year reads show the share of plans offering an OTC allowance falling (66% for 2026 against 73% for 2025), meals falling, and transportation falling, while in-home support and caregiver support rose. Industry analysts expect further pressure on OTC, meals and transportation for 2027. Do not assume your 2026 allowance carries into 2027 at the same amount.
Two figures to keep straight while you compare: the 2026 standard Part B premium is $202.90 a month with a $283 deductible, and CMS has not published the 2027 Part B premium or deductible as of late October 2026. It is normally released in mid-November. Any 2027 Part B figure you see before then is a projection, not the premium.
For the broader 2027 changes, see Medicare Advantage plans 2027 and Medicare Advantage out-of-pocket maximum 2027.
How to find which plans include an OTC allowance for 2027
Open enrollment runs October 15 to December 7, 2026, and whatever you pick takes effect January 1, 2027.
- Read your Annual Notice of Change first. Plans mail it by September 30. It compares your 2026 benefits to your 2027 benefits side by side, including the OTC allowance. If the allowance dropped, it is in that document.
- Go to Medicare Plan Finder at medicare.gov/plan-compare. Enter your ZIP code, then your drugs and preferred pharmacies. Open a plan's detail page and look under its extra benefits section for the over-the-counter line and the dollar amount.
- Sort by what matters more than the allowance. An OTC credit worth a few hundred dollars a year does not offset a higher out-of-pocket maximum, a drug you take falling off the formulary, or your cardiologist leaving the network. Price the whole plan, then treat OTC as a tiebreaker.
- Check the catalog before you enroll, not after. Ask the plan for its OTC item list. If you buy mostly incontinence supplies or diabetic socks, confirm those are on it.
- Call 1-800-MEDICARE or your State Health Insurance Assistance Program (SHIP). SHIP counseling is free, unbiased and not paid on commission.
- If you have Medicaid or a Medicare Savings Program, say so. It changes which plans you can join and when you can switch. Start with Medicare Savings Programs income limits.
Already in a Medicare Advantage plan and past December 7? You get a second window, the Medicare Advantage Open Enrollment Period, January 1 to March 31, 2027, to change MA plans or return to Original Medicare one time. Details in how to switch Medicare Advantage plans and the annual enrollment period dates.
How much the allowance is really worth
Run the arithmetic before letting an OTC credit decide anything. A quarterly allowance is worth four times the quarterly figure only if you spend all of it, every quarter, on items you would have bought anyway. Credit you forget to use, or spend on products you do not need, is worth nothing. Meanwhile the numbers that move real money in a Medicare Advantage plan are the out-of-pocket maximum, the drug tier your prescriptions sit in, and whether your doctors are in network. Which plan features actually matter walks through that ranking.
Frequently Asked Questions
Does Medicare give everyone an OTC card?
No. Medicare does not issue OTC cards. The allowance exists only inside some Medicare Advantage plans. If you have Original Medicare, with or without a Part D plan and with or without Medigap, you have no OTC benefit. Any offer of a government-issued card for all seniors is misleading.
Can I use my OTC card for groceries?
Usually not. A standard OTC benefit is limited to health-related non-prescription products. Grocery and healthy-food credits are generally Special Supplemental Benefits for the Chronically Ill, which plans may offer only to enrollees who meet CMS's three-part chronically ill test. Some plans combine OTC and food on one card for qualifying members, which is why answers differ plan to plan. Your plan's catalog is the authority.
What happens to money I do not spend?
In most plans it expires at the end of the month or quarter and does not carry forward. For the 2027 plan year, CMS requires these cards to be limited to the plan year, so any remaining balance ends December 31 at the latest. Plans are also no longer required to send a mid-year notice about unused benefits, so track the expiration date yourself.
Why did my card get declined on something it used to buy?
Three likely reasons. The item is not on your plan's catalog and a previous cashier approved it anyway. Your balance for the period is used up. Or your plan has moved to the 2027 real-time verification CMS now requires, which screens items individually at the register. If the item is on your catalog and the card still declines, keep the receipt and ask member services for reimbursement.
Which plans have the biggest OTC allowance in 2027?
It varies by county, and we do not recommend specific plans or companies. Allowances are set by each plan and published October 1 for the next year, so the only accurate answer for your address is Medicare Plan Finder at medicare.gov/plan-compare or your plan's Annual Notice of Change. Special Needs Plans tend to include an allowance far more often than general plans: 94% of SNPs offered one for 2026 against 66% of individual plans.
Is a flex card the same as an OTC card?
"Flex card" is marketing language, not a Medicare term. It is used for OTC allowances, for dental or vision credits, and for SSBCI food and utility benefits, sometimes all on the same piece of plastic with separate purses that cover different items. Because the term covers several different benefits with different eligibility rules, read what your plan's documents call it rather than what an ad calls it.
Can I get an OTC allowance if I only have Medicaid?
Medicaid is separate. Some state Medicaid programs cover specific over-the-counter products, often only with a prescription from your doctor, and the list is set by the state. That is not an OTC card and it is not Medicare. If you have both Medicare and Medicaid, a Dual Eligible Special Needs Plan is the usual way to get a Medicare OTC allowance on top of Medicaid coverage.
Do I have to pay tax on the allowance?
An OTC allowance is a health plan benefit, not income, and it is not reported to you as income. It also is not cash: you cannot withdraw it, transfer it, or spend it outside the plan's eligible items and participating retailers.
Sources
- CMS, "Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2027," September 28, 2026 (plan counts, projected premium, enrollment, supplemental benefit stability)
- CMS fact sheet, "Contract Year 2027 Medicare Advantage and Part D Final Rule" (CMS-4212-F), April 2, 2026 (debit card real-time verification, plan-year limit, SSBCI criteria posting, rescission of the mid-year unused benefit notice)
- CMS CY2027 Rate Announcement (2027 Part D out-of-pocket cap of $2,400)
- CMS fact sheet, "2026 Medicare Parts A & B Premiums and Deductibles," November 14, 2025 ($202.90 premium, $283 deductible)
- KFF, "Medicare Advantage 2026 Spotlight: A First Look at Plan Premiums and Benefits" (66% of individual plans and 94% of SNPs offering an OTC allowance for 2026; 73% in 2025)
- Social Security Act section 1860D-2(e)(2)(A) and the CMS Prescription Drug Benefit Manual, Chapter 6 (exclusion of non-prescription drugs from Part D)
- 42 CFR 422.102 (supplemental benefits); CMS chronically ill definition for SSBCI
- Medicare.gov, joining a plan and enrollment period dates (October 15 to December 7; January 1 to March 31)
This article is informational. Benefits Navigator is not affiliated with Medicare, CMS, or any insurance company, and does not recommend specific plans. Verify every figure against your own plan's Annual Notice of Change and Evidence of Coverage before you enroll.
