How to spend Medicaid and Medicare Advantage over-the-counter (OTC) benefit

Most people want to spend their retirement dollars on things they really enjoy. But very few take advantage of a common Medicare Advantage feature that covers eligible health and wellness products on their shopping list, which helps them keep money in their pockets.

Anyone who has a Medicaid or Medicare Advantage plan may also have an over-the-counter (OTC) benefit. It’s included in nearly 8 out of 10 plans and typically allows an average OTC allowance of $400 per person. Still, very few people spend their allowance fully. In fact, as of 2021, 70 percent of OTC benefits go unused every year.

Don’t let those benefits go to waste! This season-by-season guide helps plan members prep their OTC benefit shopping lists so they can stock up on the eligible products they need.

In this article:

What’s the OTC benefit?

An OTC benefit is a part of most Medicare Advantage plans. It gives a person money to spend on eligible OTC products. This benefit is typically a fixed allowance that is provided every month, quarter or annually. If someone has this benefit, they can spend this money on a wide range of eligible items that help with health and wellness — items they might currently be paying for out of their own pocket.

In many plans, unspent benefit money doesn’t carry over from one benefit period to the next. That means people have to use it or lose it. In fact, that’s what happens to most of these OTC benefit funds.

To maximize their benefits, it might be helpful for people to make a spending plan for every period. When the season begins, they can list out every need they might have in the months ahead.

OTC plan for the spring

Allergy medications

Trees and plants produce pollen during certain times of the year. As a result, allergens are widespread and vary by region and climate. For many people, things like tree, grass and ragweed pollens can cause sneezing, coughing or runny nose.

A variety of OTC products — including antihistamines, allergy eye drops and nasal sprays — can help people with symptom relief. But they should be sure to speak with a health care provider before using them.

Pain relievers and bandages

Gardeners know the rewards of planting and weeding, but these activities can also leave them feeling achy. Someone dealing with joint paint should first speak with their health care provider about pain relief. Anyone in need of pain relievers or topical analgesics can consider stocking up on them with their OTC benefit. Gauze and bandages may also be covered and are good to have on hand in the event of minor injuries.

Bonus: mobility devices

People who are finding it a little tougher to get around may be in luck. Using a mobility device, such as a cane or walker, may help people with limited mobility. These products are often included in many OTC benefit programs.

OTC plan for the summer

Sunscreen

It is recommended that people should wear sunscreen all year. But in a 2020 survey, many adults report not using any form of protection against the sun when they venture outdoors. Sunscreen is still important for older adults because it helps prevent new age spots from forming. It also helps reduce a person’s risk of developing skin cancer. People should wear a hat or protective clothing when they go out and put sunscreen on any exposed skin. It is recommended that people use broad-spectrum, water-resistant sunscreen with a sun protection factor (SPF) of at least 30. Sunscreen should be applied liberally and often.

Here’s what people should know about sunscreen and the OTC benefit.

Insect repellent

If someone enjoys the great outdoors in the summer, they may want to apply some insect repellent. Happily, some repellents are included on some OTC benefit eligible product lists.

Bonus: grab bars

Someone who has extra dollars may consider buying grab bars. They can be installed in the shower, next to the toilet or anywhere else a person’s balance may be unsteady.

OTC plan for the fall

Travel aids

Many older adults wait until fall to go on vacation, allowing them to enjoy pleasant weather and smaller crowds. No matter the destination, consuming unfamiliar cuisine can sometimes cause gastrointestinal distress. So, this is a good time to stock up on travel medications.

If a person’s travels include an ocean cruise or somewhere they might get seasick, motion sickness relief support medications are usually covered by the OTC allowance, too. A person should speak with their health care provider before starting or stopping any type of OTC product or supplement.

Bonus: first aid kit

Every home should have a first aid kit. If someone’s not sure if their kit is up to snuff, they can stock up and update their first aid kit.

OTC plan for the winter

Cold and flu medications

It’s important for older adults to be ready for winter illnesses with proper products. Medications expire over time, which can make them less effective and also potentially risky, so it’s important to check expiration dates.

People should consult with their health care provider before taking new medications.

Here’s what people should know about preparing for the season of sniffles and coughs with their OTC benefit.

Hand sanitizers

These come in handy during the cold months and may help kill germs that cause illnesses. For a quick cleanse, hand sanitizer with at least 60 percent alcohol can work well after grocery shopping and other outings. Handwashing is still preferred, but these products can help in a pinch when there’s no access to soap and water.

Vitamins and supplements

Those who take multivitamins or any other dietary supplement may be able to get the products they need with their OTC benefit. But before taking anything new, it’s important for a person to consult their health care provider.