Understanding Over-the-Counter Benefit Cards and How They Work
An over-the-counter (OTC) benefit card is a prepaid debit card that certain Medicare and Medicaid plans offer to their members. Unlike a health insurance card that covers doctor visits and prescriptions, an OTC card holds a dollar amount that members can spend specifically on items you buy without a prescription at drugstores and supermarkets. These cards come from your insurance plan—not from a government agency—and the funds load directly onto the card each year.
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The card works much like a gift card or prepaid debit card. You present it at checkout when purchasing eligible items, and the amount deducts automatically. When the balance runs out, the card stops working until your plan reloads it the following year. The specific dollar amount varies by plan. Some plans offer $50 per year, while others may offer $150 or more. The amount you receive depends entirely on which insurance plan you're enrolled in and what benefits that plan has chosen to include.
OTC cards became more common after changes to Medicare and insurance regulations expanded what could be covered. In 2023, Medicare made it possible for more plans to offer OTC benefits as part of their standard coverage. This means more people with certain types of insurance now have access to these cards than ever before. The expansion wasn't based on need or income—it was a change in what plans are allowed to offer.
It's important to know that these cards only work on items the plan has decided to cover. Not every product in a store qualifies. Common eligible categories include pain relievers, cold and flu medicine, allergy medication, antacids, and first aid supplies. Some plans also cover items like blood pressure monitors, glucose meters, or heating pads. The list of what qualifies is set by your specific insurance plan, not by a government body.
Takeaway: An OTC card is a benefit your insurance plan may offer—it's a separate tool from your health insurance itself. Understanding what your specific plan covers is the first step to using the card effectively.
Who Can Access an OTC Card Through Their Insurance
OTC cards are offered by specific Medicare Advantage plans, Medicaid managed care plans, and some employer-based health plans. The key word is "offered"—your insurance company decides whether to include this benefit. Not every person with Medicare or Medicaid gets an OTC card because not every plan includes one.
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If you have Original Medicare (Part A and Part B) without a supplemental plan, you typically won't have an OTC card through Medicare itself. However, if you're in a Medicare Advantage plan (also called Part C), there's a higher chance your plan includes OTC benefits. According to recent data, more than half of Medicare Advantage plans now offer some form of OTC coverage, which is a significant increase from previous years. For Medicaid, it depends on your state and your specific managed care plan.
If you have insurance through your employer, some companies have added OTC cards as a wellness benefit. This is particularly common among larger employers. The reasoning is that covering low-cost items like pain relievers and cold medicine may prevent people from making more expensive doctor visits or emergency room trips.
To know whether you have access to an OTC card, the most direct approach is to look at your insurance plan's materials. Your plan documents should list all covered benefits. You can also contact your insurance plan directly and ask if OTC benefits are included. Many plans now include this information in welcome packets and on their websites. If you're enrolling in a Medicare Advantage plan during open enrollment, the plan comparison tools will show which plans offer OTC coverage and in what amounts.
Age, income, and health status generally don't determine whether you receive an OTC card—your plan does. A person with a high income in a certain Medicare Advantage plan may get the card, while someone with lower income in a different plan might not. It's entirely about which plan you're in, not about personal circumstances.
Takeaway: Your insurance plan decides if you get an OTC card. Check your plan documents or contact your insurer directly to find out whether this benefit is part of your coverage.
Finding and Reviewing Your Plan's OTC Covered Items List
Each plan maintains a list of items that their OTC card can purchase. This list is sometimes called a "formulary" for OTC products or a "covered items list." The list is the official document that tells you exactly what qualifies and what doesn't. Without checking this list, you might assume an item will work and then be surprised at checkout when it doesn't.
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These lists are typically found on your insurance plan's website. If you have a Medicare Advantage plan, you can usually find the OTC formulary by logging into your plan's member portal or by visiting their public-facing website. The document is usually in PDF format and may be organized by category—such as pain relief, digestive health, cold and cough, first aid, and so on. Some plans also include the specific brand names or note whether generic versions are covered.
If you don't have online access or prefer to speak with someone, you can call the customer service number on your insurance card. Representatives can tell you whether a specific item is covered. It can help to have the exact product name or description ready when you call, as some plans have very specific coverage rules. For example, one plan might cover ibuprofen tablets but not ibuprofen liquid, or they might cover one brand name but not another.
Keep in mind that covered items lists can change year to year. If you used your OTC card for a particular item last year, that doesn't mean it's automatically covered this year. Plans sometimes add or remove items based on their health priorities and budgets. This is another reason to check the current list at the beginning of each benefit year rather than assuming coverage based on past experience.
Some plans organize their lists in print form as well, which they mail to members or make available by phone request. Don't hesitate to request a paper copy if that's easier for you to use while shopping. A printed list in your wallet or purse can be a practical reference tool at the pharmacy or store.
Takeaway: Before you spend your OTC card balance, find and review your plan's specific covered items list. This prevents wasted money on items that won't actually work with your card.
How Food Benefits Relate to OTC Cards and Wellness
While OTC cards typically don't purchase groceries, some insurance plans and programs have begun offering related food supports that work alongside OTC benefits. It's important to understand the difference and how they might work together in your overall health coverage.
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Some Medicare Advantage plans now include supplemental benefits for certain foods. These aren't common, but some plans offer vouchers or credits for medically tailored meals or specific food items for people with chronic conditions like diabetes. These work separately from your OTC card and are usually managed through a different program or partner company. The foods covered might include diabetic-friendly snacks, heart-healthy frozen meals, or produce vouchers, depending on the plan and your documented health needs.
Additionally, some Medicaid programs in certain states have expanded to include food support programs like SNAP (the Supplemental Nutrition Assistance Program, formerly called food stamps). SNAP is a separate federal program from your health insurance and isn't part of an OTC card. However, it serves a similar purpose of helping people afford basic health needs. Some people qualify for both an OTC card through their Medicaid managed care plan and SNAP benefits—these programs can complement each other.
The connection between OTC cards and food is really about overall wellness. The logic behind many of these benefits is that preventing health problems through medicine and nutrition is more cost-effective than treating serious illnesses. If you can afford pain relievers, cold medicine, and healthy food, you're less likely to end up in an emergency room. Insurance plans and government programs recognize this connection and design benefits around it.
If you want to learn more about whether food support programs might be available to you separately from your OTC card, your insurance plan's social worker or a community health center can provide that information. These are specialized questions that local resources often handle better than general insurance customer service.
Takeaway: Food benefits and OTC cards are separate but complementary. Understand what your plan offers in both areas to use all available resources for your health.
Practical Tips for Using Your OTC Card Wisely
Once you understand how your OTC card works and