Medicare Advantage OTC Allowances Underused by Seniors Amid Rising Costs

Medicare Advantage, the leading form of Medicare with close to 30 million enrollees, includes over-the-counter (OTC) allowances averaging $400 annually to cover non-prescription health and personal care items. Despite its availability, about 70% or $5 billion of these OTC benefits go unused each year, representing a significant missed saving opportunity for seniors, especially those on fixed incomes. These OTC allowances support essential health care products such as pain relief, cold and flu remedies, digestive health aids, dental care, and skincare products. Plans generally require members to use their benefits within specific timeframes as these allowances do not typically roll over. Data from Kenvue underscores that while cost concerns do not usually stop seniors from maintaining personal care routines, OTC allowances alleviate financial burdens and promote consistent product use. Members can redeem these benefits through provider catalogs, retail OTC debit cards, or reimbursement programs for eligible branded products including Tylenol, Pepcid, Listerine, and Band-Aid. Kenvue, serving as the largest consumer health company by revenue, emphasizes the importance of educating Medicare Advantage members about maximizing these OTC benefits to capture available savings and maintain health routines effectively. This OTC benefit represents a practical financial aid for the Medicare population amid persistent consumer price inflation.