The issue affects nearly 35.5 million people enrolled in Medicare Advantage, the privately administered alternative to traditional Medicare. According to the Medicare Payment Advisory Commission, the federal government is expected to pay these plans nearly $615 billion this year, including an average of $2,660 per member for supplemental benefits unavailable through traditional Medicare.
Extra Benefits Expanded Far beyond Traditional Medical Care
Medicare Advantage plans have long offered dental, vision, hearing and fitness benefits, but federal policy expanded the range of permissible extras beginning in 2019. The Centers for Medicare and Medicaid Services allowed plans greater flexibility to provide services intended to prevent or reduce illness.
Congress later permitted a broader category known as Special Supplemental Benefits for the Chronically Ill. These benefits do not have to be primarily health-related, but they must have a reasonable expectation of improving or maintaining a member’s health. That flexibility has produced a wide range of offerings. Some plans help pay for groceries, transportation, home modifications, utility bills, internet service, pet supplies or meals after a hospital stay. Others provide allowances through debit cards or online “wellness wallets.”
John Holland, 78, of Gorham, Maine, receives $50 every three months on a debit card from his Martin’s Point plan for items such as toothpaste, Band-Aids and sunscreen. He also receives $300 a year through a wellness wallet that can be used for acupuncture, Weight Watchers classes and sporting goods, including pickleball paddles, kayaks and canoes. Martin’s Point chief marketing and sales officer Steve Amendo said the benefits are intended to keep members “healthy, active and socialized.”
Federal officials are now drawing firmer boundaries. According to CMS, medical marijuana cannot be covered because cannabis products that remain illegal under federal law do not qualify, regardless of state rules. Shopping club memberships such as Costco are also excluded when they include benefits such as streaming services or travel discounts that do not meet health-related requirements.
Regulators Focus on Confusion, Eligibility and Spending
The variety of benefits can be difficult for members to navigate because eligibility, dollar amounts and purchasing rules differ by plan and location. UnitedHealthcare members with certain chronic illnesses, for example, can receive $407 a month in some Virginia counties, while similar members receive $35 in some New York counties.
Other members without a chronic illness or Medicaid eligibility may receive $25 every three months in parts of Oklahoma but $250 in some Tennessee counties. Medicare’s online plan finder helps beneficiaries compare options, although some detailed information is available only by contacting insurers directly.
New rules taking effect Jan. 1 will require plans to publish eligibility criteria for chronic-illness benefits and provide clearer instructions for debit-card use. Plans must also verify purchases at the point of sale so cards pay only for covered items.
Questions also remain about how much of the federal funding for supplemental benefits is actually spent. According to Gretchen Jacobson of the Commonwealth Fund, CMS does not require insurers to disclose how much they spend on these benefits or how much remains unused.
A Biden-era requirement that would have notified members each July about unused supplemental benefits was delayed and later rescinded by the Trump administration. As CMS prepares further changes for 2027, insurers are also expected to reduce some benefits as they seek to control costs.
