What drugstore items can the Medicare Advantage OTC Benefit cover?

Reaching retirement age means having earned a few perks. Movie tickets could cost folks a few dollars less, and they might even pay a little less at restaurants around town. They can also get a helping hand with certain out-of-pocket costs to support their health.

Many Medicare Advantage members have access to over-the-counter (OTC) benefits at no additional cost.* With these OTC benefits, they can get help paying for OTC products. An OTC benefit is included in most Medicare Advantage plans, and if eligible, it can be used to buy eligible OTC items like toothpaste, vitamins, cough syrup and much more.

“Using the Medicare Advantage OTC benefit is crucial,” says Caitlin Donovan, senior director at the National Patient Advocate Foundation.

What exactly is the Medicare Advantage OTC benefit? And how can shoppers take advantage of it? Continue reading to find out more.

In this article:

What is the OTC benefit?

Medicare Advantage OTC benefits are offered by most Medicare Advantage plans. The benefit is an allowance to redeem certain OTC items available at most drugstores.

While most Medicare Advantage plans have an OTC benefit, the specifics come down to individual programs and insurance providers. Some key differences can vary from plan to plan:

• Allowance amount. Allowance amounts may vary by plan. In 2021, the average plan offered $400 per year, but the amount may be more or less.
• Eligible stores. Many plans allow eligible members to shop in-store at CVS, using their Medicare Advantage OTC benefit card.
• Eligible purchases. Eligible members can typically buy common drugstore items like aspirin, vitamins, toothpaste and antihistamines with their Medicare Advantage OTC benefits.
• How often the card reloads. Benefit periods vary by plan. Some are monthly or quarterly, others are annually. At the start of each benefit period, the OTC benefit card automatically reloads with the qualifying benefit dollar amount. Often, unused funds do not carry over into the next benefit period.

To understand and make full use of Medicare Advantage OTC benefits, it’s important for people to contact their insurance provider. That way, they can discuss details about how the plan works.

How do shoppers know if they have an OTC benefit?

If shoppers have a Medicare Advantage or a Medicaid plan, an OTC benefit may be included. The best way to know is to ask their insurance provider.

They can call the customer service number on the back of their Medicare Advantage card to find out whether it’s included. That number should also get them information about how to use the OTC benefit and what is covered. 

Do most people use their OTC benefits?

It’s a great benefit — benefit dollars for products that many people can use every day. But does it actually get used? The response has been mixed.

According to a 2021 report, it's estimated that only about 30 percent of OTC benefits are used annually, which means about 70 percent of benefits are unused each year.

What happens if people don’t spend their OTC benefits?

If people don’t spend their allowance, they might be leaving benefit dollars on the table. Depending on their plan, if they don’t use their benefit, it may expire at the end of the benefit period.

Although plans may vary, often Medicare Advantage OTC benefits operate on a “use it or lose it” basis, and benefit dollars do not roll over into the next benefit period.

What can shoppers use the OTC benefit for?

Items covered by the benefit vary from plan to plan. Members can reach out to their insurance providers to understand exactly which OTC products they can get.

There are also some shortcuts. CVS stores make it easier with “OTC Eligible” blue tags. While this might not extend to every plan, these tags flag the types of products that are widely covered.

Products often covered may include:

• Adult care (overnight underwear, cleansing wipes, bladder control pads)
• Allergy medicine
• Cold and flu medication
• Digestive health (fiber, antacids, stool softener, gas relief support)
• Ear and eye care (eye drops, contact solution, ear wax removers)
• First aid (antibiotic ointment, bandages, face masks)
• Foot care (antifungal creams, corn removers, compression socks)
• Home diagnostics (COVID-19 tests, blood pressure monitors)
• Home health care (bathmats, canes, shower chairs)
• Nicotine replacement and smoking cessation support
• Oral care (toothpaste, toothbrushes, denture cleaner)
• Pain relievers (ibuprofen, aspirin, muscle rubs)
• Personal care (sunscreen, face wash, hand sanitizer)
• Vitamins and supplements
• Women’s health (maxi pads, yeast infection creams)

Can shoppers use their OTC benefit for anything at the drugstore?

The OTC benefits card can only be used on items that are covered by specific Medicare Advantage or Medicaid plans. Generally, this won’t include things like holiday decor, pet care and beauty — in other words, purchases that don’t contribute to someone’s health.

There will also be limits on the participating brands and products. And there may be limits to how much of one item shoppers can redeem during any one period. Again, they should check with their plan for details. 

How can people use their OTC benefit?

Some Medicare Advantage plans may offer the option to redeem through CVS. If so, members can use it in-store on eligible products. All they need to do is visit a participating CVS store and select the eligible OTC products they want to buy (blue tags signal products that are often covered). Some insurance providers will send a benefits card, which members can use as they would a debit or credit card. 

Is it easy to use the OTC card?

By and large, using the OTC benefit should be fairly straightforward. People can use the benefit multiple times as long as the benefit allowance hasn’t run out. If they buy something that goes over their allowance, they may be able to pay the rest out of pocket.

At CVS, shoppers can ask for assistance from an in-store employee. Remember: The trickiest part might be remembering that they have these benefits and need to make the most of them. Setting a digital reminder on their phone — or even leaving a note on the refrigerator — might help. “People shouldn’t be afraid to use the benefit,” Donovan says.

Can caregivers use OTC cards?

In most cases, yes, a caregiver can use an OTC card. They’ll follow the same process of shopping for eligible items. Then at the checkout, they will generally need the Medicaid or Medicare Advantage member’s benefit card and/or plan information. The store employee may sometimes ask for another form of ID from the member.

Here’s some more information on how the OTC benefit can support caregivers, including tips on shopping for people over 65. 

Tips for using the OTC card

Shoppers want to make sure they use every dollar of their benefit before it expires. But beyond that, there are a few considerations to help stretch those dollars.

“People should think about their own budget and when they might need the extra assistance,” Donovan says.

It’s important to speak to a health care provider before starting or stopping any vitamin, supplement or new OTC medication.

Customers can also make a seasonal purchase plan, where they map out what they’ll buy all year and when they’ll place those orders. That can ensure they make the most of their OTC benefits.