If you have a Medicare Advantage plan, you may have a card in your wallet that pays for aspirin, bandages, and cold medicine. That is an over-the-counter (OTC) allowance, and it is not guaranteed to come back every year. Open enrollment runs through December 7, so this is the month to check.
What an OTC allowance is
Some Medicare Advantage plans give members a set dollar amount, usually loaded on a prepaid card or available through a catalog, to spend on approved non-prescription health items. Think pain relievers, vitamins, first-aid supplies, and allergy medicine. Original Medicare does not include this benefit, so it is an extra that each plan chooses to offer.
How common is it, and is it shrinking?
According to KFF’s 2026 Medicare Advantage analysis, 66% of individual plans offered an OTC allowance in 2026, down from 73% in 2025. Special needs plans offer it far more often, at 94%. The 2027 numbers are not published yet, so the only way to know about your plan is to read your own paperwork.
Where to find your 2027 answer
Your plan must send an Annual Notice of Change by the end of September. It lists what changes on January 1. Use this checklist:
- Find the section on extra benefits and look for “over-the-counter” or “OTC.”
- Write down the dollar amount for 2026 and for 2027, and note whether it is monthly, quarterly, or yearly.
- Check whether unused dollars roll over or expire at the end of each period.
- Check whether the OTC amount was merged into a combined benefit with other perks such as groceries.
- Look at the list of covered items and where you can shop with the card.
The use-it-or-lose-it math
Here is a hypothetical example. Say your plan gives $25 a month and nothing rolls over. If you spend $20 in a typical month, you leave $5 behind each time, or $60 a year. A plan that gives $75 a quarter with the same spending habits would leave less on the table, because you can spend it whenever you need to.
| Your plan’s rule | What it means for you |
|---|---|
| Monthly allowance, no rollover | Spend it every month or it disappears |
| Quarterly or yearly allowance | More flexibility for bigger purchases |
| Rollover allowed | Unused dollars carry forward, but check the deadline |
| Allowance removed for 2027 | Compare it against what you spent in 2026 before deciding |
What to do before December 7
- If your 2027 notice still lists an OTC allowance that fits how you shop, you may not need to do anything else.
- If it shrank or disappeared, add up what you spent from the card in 2026 and compare that to any change in premium, drug coverage, and doctors in network.
- If another plan fits better, you can switch during open enrollment (October 15 to December 7). Members already in a Medicare Advantage plan also get a one-time change window from January 1 to March 31.
- For free one-on-one help, call your State Health Insurance Assistance Program (SHIP) counselor.
Key dates at a glance
| Date | What happens |
|---|---|
| By September 30 | Your plan must send the Annual Notice of Change (ANOC) listing what changes on January 1 |
| October 15 | Open enrollment begins; plans also have to post the ANOC on their website by this date |
| December 7 | Open enrollment ends. Changes you make by this date start January 1 |
| January 1 | Your 2027 plan year and benefits begin |
| January 1 to March 31 | If you are already in a Medicare Advantage plan, you get one change: another Medicare Advantage plan, or back to Original Medicare |
A worked example: the allowance versus the premium
An allowance only matters if it is worth more than what you give up to get it. Here is a hypothetical comparison. These numbers are made up for illustration, so swap in the figures from your own notice.
- You spend about $180 a year on eligible OTC items.
- Plan A has a $0 premium and cut its 2027 allowance to $100 a year.
- Plan B has a $20 monthly premium ($240 a year) and a $200 yearly allowance.
| Plan A | Plan B | |
|---|---|---|
| Value of the allowance you would actually use | $100 | $180 |
| Premium you pay for the year | $0 | $240 |
| Net result | +$100 | -$60 |
Even though Plan B has the bigger allowance, Plan A comes out $160 ahead in this example. Before you chase an allowance, also compare doctor networks, drug coverage, and the plan’s yearly out-of-pocket maximum, because those can cost or save far more than a pharmacy card.
Which situation are you in?
- Your allowance stayed the same or grew: confirm your doctors and medicines are still covered, then you can likely stay put.
- Your allowance shrank a little: run the math above. A small cut rarely justifies switching if everything else still fits.
- Your allowance disappeared: add up what you really spent from the card in 2026. If it was small, the loss may cost you less than a higher premium elsewhere.
- You are thinking about leaving Medicare Advantage entirely: be careful. Outside certain protected windows, a Medigap insurer in most states can ask health questions and may refuse you or charge more. Talk to a SHIP counselor before you drop your plan.
Common mistakes to avoid
- Assuming your 2026 card balance carries into 2027. Check your plan’s rules and spend any remaining dollars before they expire.
- Comparing only the headline dollar amount and ignoring whether it is monthly, quarterly, or yearly.
- Skipping the list of covered items and participating stores. A card that does not work at the pharmacy you use is worth less than it looks.
- Waiting until the last week of open enrollment. Counselors and plan phone lines get busy near December 7.
An OTC card is a nice perk, but it should not be the deciding factor on its own. A plan that covers your doctors and medicines is worth more than a plan with a bigger allowance you rarely use.