The end of the calendar year means it's "use it or lose it" time on elective health spending for as many as 33 million Medicare beneficiaries.
Report: 70% of This Medicare Benefit Goes Unused—Here Are Smart Ways To Spend It
Published on Dec. 13, 2024
There’s no question healthcare is in the national spotlight, with some healthcare industry leaders backpedaling recently announced cuts to consumer policies, and incoming presidential leadership reportedly discussing cuts to government programs like Social Security and Medicare.
Meanwhile, as the youngest Baby Boomers reach age 60, Medicare—the federal health insurance program for Americans aged 65 and up—is seeing a surge in membership. As of 2024, 32.8 million people are enrolled in Medicare Advantage, which serves as a private market alternative to Medicare Fee-for-Service. In fact, according to the Kaiser Family Foundation (KFF), a health policy research and polling organization, this particular plan has seen a 7% growth since just one year ago in 2023, representing over 2 million new beneficiaries.
What many Medicare beneficiaries might not know is that $7.1 billion in allowances across all subscribers remain untouched each year, according to the Consumer Healthcare Products Association.
Of that, $5 billion is money you can spend on over-the-counter products, says a spokesperson for Kenvue (the maker of Tylenol, Zyrtec, Band-Aid, Listerine, and more consumer health products). This spokesperson notes that Medicare Advantage plans provide what works out to an average of $400 in annual allowances per beneficiary. “Data shows 70% of OTC allowances go unused each year—leaving $5 billion on the table, and forfeiting access to crucial products for cough, cold, allergy, and first aid that seniors depend on for everyday care,” he says on behalf of the company.
In many cases, that money doesn’t roll over. “[Over-the-counter] allowances are a use-it-or-lose-it benefit under many plans,” Kenvue’s spokesperson explains. “The allowances don’t roll over into the new plan cycle, whether it’s on a monthly, quarterly or annual basis.” This means some beneficiaries “may lose any leftover balance of their 2024 OTC funds if they don’t use them all up before the New Year.”
That makes the end of the year a good time to check on over-the-counter coverage under your plan. Medicare Advantage plan holders may tap unused funds across a wide range of product categories:
- Pain and fever medications such as Tylenol, and pain creams, such as Bengay
- Cold, cough, and flu medicines
- First-ad products, like bandages and Neosporin
- Allergy medications
- Sleep aids
- Nutritional supplements for immunity and other dietary needs
- Incontinence pads, underwear, wipes and diaper rash cream
- Topical skin treatments for eczema, psoriasis, and other dermatological conditions
- Sun protection
- Digestive health products for acid, heartburn, and anti-diarrheal medication
- Eye drops
- Dental and oral care
- Acne treatments
Medicare Advantage policy holders should check with their provider to understand how often their OTC allowance balance is renewed and learn more about product eligibility.
It’s also a good idea to make a plan for how you’ll access those funds. The Kenvue site says there are three key ways to do so:
- Catalog/Online, Phone, or Mail Order: Beneficiaries can peruse catalogs or websites with eligible products and place an order via a website, app, phone or mail.
- Receipt Reimbursement: After purchasing an eligible product, beneficiaries can submit their receipts for reimbursement.
- Debit Card at Retail: Beneficiaries can use their OTC debit card & purchase eligible items in a separate transaction.
Understanding your health insurance policy puts the power back in your hands and keeps cash in your wallet. You can contact a Medicare service representative by calling 1-800-MEDICARE (1-800-633-4227) 24 hours a day, 7 days a week.
For daily wellness updates, subscribe to The Healthy by Reader’s Digest newsletter and follow The Healthy on Facebook and Instagram. Keep reading:
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