Does My Medicare Plan Pay for OTC Medications?

does my medicare plan pay for otc

One question we hear the most: “Does medicare cover OTC items, and if so which ones?” From cholesterol medication and blood thinners to acetaminophen, heartburn and cold medicine, Medicare recipients know how fast drug costs add up. Of course, your Part D plan covers your prescription drugs. So where does this leave the every day over-the-counter (OTC) supplies you need? Most health insurance plans haven’t covered these types of drugs. But that’s starting to change—especially under Medicare. Today we want to help you answer the question: does my Medicare plan pay for OTC?

Does my Medicare plan pay for OTC?

OTC coverage is only available as a part of Medicare Advantage Plans (“MA Plans” or Part C). Neither Medicare Parts A and B (Original Medicare) nor Part D drug plans cover OTC medications. If you’re currently on a Medicare Advantage Plan, and aren’t sure if your plan includes OTC benefits, check with your agent. Keep in mind that this plan feature actually covers much more than just medications, so you definitely don’t want to miss out. You can use your OTC benefits to pay for scooters, canes, denture-related products and even first aid supplies. 

If you have Original Medicare, and you’re interested in switching to an Advantage Plan, you may qualify for a Special Enrollment Period (SEP) that will allow you to change plans right away. (More on SEPs here.) If you don’t qualify for a SEP, you’ll have to wait for the Open Enrollment Period (OEP) that runs from October 15 to December 7. 

Advantage Plans continue to grow in popularity, in large part due to this expansion in coverage. In 2021, 42% of beneficiaries enrolled in an MA Plan, a number that’s steadily increased over the last decade. Of these plans, 71% offer some sort of OTC benefit, up from 51% just two years ago. 

You may be receiving OTC benefits if you also have Medicaid coverage (known as dual eligibility). But since Medicaid is administered at the state level, your OTC coverage will depend on where you live. So check your plan for eligibility and details.

Why are Advantage Plans providing OTC benefits?

The rise in OTC supplemental benefits is because of new regulations in the CARES Act. The changes are aimed at increasing preventative care, decreasing overall costs for recipients and loosening restrictions on Advantage providers. 

Does Medicare Cover OTC Items: The Answer Will Shock You!

Seniors say that features like OTC benefits are a motivating factor in deciding which plan they ultimately choose. In 2021, plans that offered OTC benefits saw a 15% growth in enrollment, so these supplemental benefits are a major draw to beneficiaries. The largest rise in OTC coverage has been in national plans (like Aetna and United) more so than regional, provider-sponsored plans or Not-for-Profit (NFP) plans. 

How do I use my OTC Benefits?

Benefits usually come in the form of a prepaid OTC drug card. Your provider will automatically reload your card each month or quarter. And just like a debit card, you’ll need to activate your card before you use it. 

Not all providers offer the same coverage, so make sure you know what’s included in your plan. Most providers have a list of eligible products available on their websites. And you shouldn’t have any trouble finding a store that takes your card. Many providers have partnered with large drug store chains to streamline purchasing for both online and retail locations. 

Keep track of your card balance so you don’t end up wasting your benefits! Generally, your unused balance will expire if you don’t spend the funds in time. With the average OTC allowance in 2021 being $420, knowing how much and when your card is funded will definitely save you money at the drugstore! 

Is my HSA the same as an OTC allowance?

You may have seen signs in your drugstore lately advertising certain products that are eligible for purchase with your Health Savings Account (HSA). Your HSA is not the same as OTC benefits. Back to the the expansion of the CARES Act, you can now pay for OTC medications with both HSA and Flexible Spending Accounts (FSAs). If you have an HSA account and OTC benefits, you can use them both to cover OTC expenses.

If you’re unsure about your OTC coverage or have additional questions, contact your agent or call us at 877.255.6273.


image credit: shutterstock/Kwangmoozaa

Pete Blasi