Healthy food benefit vs OTC card: what’s the difference?

Introduction

If you are comparing Medicare Advantage benefits, it is easy to mix up a “healthy food benefit” (sometimes called a grocery or food and produce benefit) with an “OTC card” (over the counter benefit). Both may come as a prepaid card, both may reload on a schedule, and both often have strict item rules that can feel confusing at the checkout.

This guide breaks down what people commonly confuse, what each benefit typically covers, and the most common restrictions so you can shop with fewer surprises.

Content

• Why people confuse these benefits
• Healthy food benefit: what it is and what it usually covers
• OTC card: what it is and what it usually covers
• Common restrictions and “why was my card declined?” moments
• How to confirm what you have in your plan documents
• Tips for caregivers helping someone use these benefits
• Related Understood Care resources
• FAQ
• References

Why people confuse these benefits

Many Medicare Advantage plans offer extra benefits beyond Original Medicare, and plans have flexibility in how they deliver them. A few things drive confusion:

• The card can look the same. Some plans issue a single card that can be used for multiple benefit categories, depending on what your plan offers.
• The benefit name is not standardized. “Healthy food benefit,” “food and produce,” “grocery allowance,” and “flex card” may describe similar ideas, but eligibility and rules can differ by plan.
• Some plans bundle benefits. A plan may combine multiple supplemental benefits into one “combination” benefit that uses one card, which makes it harder to tell which purchase is coming from which allowance.
• Store checkout systems enforce rules automatically. Even if a purchase feels reasonable, the card may only work for specific items (often by product code) and at specific retailers.

A helpful mindset: treat these cards like a benefit with a rulebook, not like a general debit card.

Healthy food benefit

What it usually is

A healthy food benefit is typically a Medicare Advantage supplemental benefit that helps pay for certain foods. In many plans, food support is offered under a category of benefits designed for people with significant chronic needs, sometimes referred to as Special Supplemental Benefits for the Chronically Ill (SSBCI).

That matters because SSBCI benefits can be targeted. Even within the same plan, not everyone automatically qualifies.

What it typically covers

What counts as “healthy food” is set by your plan, but many plans that offer a food and produce benefit allow purchases like:

• Fruits and vegetables (fresh, frozen, sometimes canned)
• Some pantry staples (for example, canned goods)
• Other plan-approved grocery items intended to support nutritional needs

Some plans also offer nutrition support in other ways, such as meal benefits in specific situations (for example, after a hospitalization) or as part of targeted chronic illness support, depending on plan design.

Common restrictions

Healthy food benefits often come with strict limits. Common ones include:

• Eligibility rules: You may need to meet plan criteria (often related to chronic conditions or care management participation).
• Approved retailers only: The card may work only at certain grocery stores, pharmacies, or online portals.
• Approved food list: Items may be restricted to a defined set of “eligible” foods. Two similar products can be treated differently at checkout.
• Schedule and expiration: Funds may load monthly or quarterly and may expire if unused (rules vary by plan).
• No cash access: You generally cannot withdraw cash or use the card like an unrestricted spending account.
• Explicit exclusions: Plans commonly exclude products like alcohol and tobacco.

If you are unsure what your plan considers “eligible,” the fastest answer is usually the plan’s item list or benefit portal, not a general internet search.

OTC card

What it usually is

An OTC card is generally a Medicare Advantage Part C supplemental benefit that helps you pay for certain non-prescription health items. It is separate from your Part D prescription drug coverage.

Plans can offer OTC items as a supplemental benefit, but they must follow Medicare rules about what qualifies as an OTC benefit and how it is administered.

What it typically covers

An OTC benefit commonly includes plan-approved items such as:

• Non-prescription medicines (for example, pain relievers, allergy medication, cough and cold products)
• First aid supplies (bandages, wraps)
• Health-related home items (for example, select monitoring or support items, depending on the plan)
• Some personal care items that your plan categorizes as health-related (varies widely)

Many plans manage this through an OTC catalog, an online store, or a card system that only works on eligible items.

Common restrictions

OTC benefits also tend to be strict:

• Eligible items only: The card may only approve items on the plan list or catalog, often enforced at checkout.
• Not for prescriptions: Prescription medications are generally not paid for with the OTC allowance.
• Not for items covered elsewhere: Medicare rules prohibit offering an OTC item as a Part C supplemental benefit if it is covered under Part A, Part B, or paid under Part D for that enrollee.
• Where you can shop: Some plans limit purchases to specific retailers or to a plan-run online storefront.
• Allowance timing: Funds may be monthly, quarterly, or yearly, and unused amounts may not roll over (depending on plan rules).
• No “cash back” behavior: The plan cannot simply give cash for OTC purchases. Plans use mechanisms like direct ordering, reimbursement with receipts, or a card linked to eligible items.

Healthy food benefit vs OTC card: the clearest way to tell the difference

If you remember one thing, make it this:

• Healthy food benefit: meant to help pay for approved groceries or nutrition-focused items, often tied to chronic condition support and sometimes limited to people who meet SSBCI criteria.
• OTC card: meant to help pay for approved over the counter health items and non-prescription drugs, based on your plan’s OTC list or catalog.

When a plan uses one combined card for multiple benefits, the key is not the plastic card. The key is the benefit wallet(s) attached to it and the plan’s eligibility rules for each wallet.

Common reasons your card is declined and what to do

When a card does not work at checkout, it is usually one of these issues:

• The item is not eligible (even if it seems like it should be).
  What to do: Check the plan’s eligible items list, and try a different brand or size that appears on the list.
• You are at a non-participating store or using the wrong checkout method (in-store vs online).
  What to do: Confirm participating retailers and whether self-checkout is allowed for your plan.
• Your balance is $0 because the funds have not loaded yet, expired, or were already used.
  What to do: Check your balance in the plan portal or by phone before shopping.
• You have one card with multiple wallets and the purchase is trying to draw from the wrong wallet.
  What to do: Ask the plan or card administrator how purchases are routed (food vs OTC) and whether separate transactions are needed.
• Your benefit is targeted and you are not currently eligible (common with SSBCI-type food benefits).
  What to do: Confirm eligibility rules in your Evidence of Coverage and ask the plan what criteria you must meet.

If you are supporting an older adult, it can help to do a small “test purchase” first so you learn the rules before a full grocery trip.

How to confirm what you have in your plan documents

To avoid guesswork, use your plan’s official documents and benefit tools:

• Start with the Summary of Benefits for your plan. Look for sections that mention:
  • “Over the Counter (OTC)”
  • “Food and produce”
  • “Healthy foods”
  • “Grocery allowance”
  • “Special Supplemental Benefits for the Chronically Ill (SSBCI)”
• Then check the Evidence of Coverage (EOC). This is usually where you will find:
  • Who is eligible
  • Where you can use the benefit
  • The schedule (monthly, quarterly, yearly)
  • The item categories and exclusions
  • Whether unused funds roll over or expire
• Use the plan’s benefit portal or catalog. For OTC in particular, the catalog or online store is often the most precise list of what will approve at checkout.

If you cannot find these documents, your plan’s member services line can usually tell you whether you have an OTC benefit, a food benefit, or a combined card, and where to find the eligible item list.

Tips if you’re a caregiver

If you are helping a parent, spouse, or someone you care for:

• Keep a photo of the card, the customer service number, and the plan name in your phone.
• Save the eligible-items link or catalog instructions so you can check items quickly.
• Plan for substitutions, because one brand may be eligible and another may not.
• If fatigue or mobility is an issue, ask whether the benefit supports mail order or online ordering.
• If confusion is persistent, consider having a short call with the plan while you are together so you can both hear the rules.

Related Understood Care resources

• https://understoodcare.com/uc-articles/flex-cards-and-grocery-benefits-that-can-also-pay-rent-or-utilities
• https://understoodcare.com/uc-articles/deep-plan-by-plan-comparisons-of-grocery-benefits
• https://understoodcare.com/uc-articles/helping-you-understand-your-benefits‍

FAQ

• What does a healthy food benefit card cover?
  It typically covers plan-approved groceries such as food and produce items that support nutritional needs. The exact eligible foods and retailers depend on your Medicare Advantage plan.
• What does an OTC card cover in Medicare Advantage?
  It typically covers plan-approved over the counter health items and non-prescription drugs, often through a catalog or online store tied to your plan.
• Can I buy groceries with my OTC card?
  Usually no. OTC benefits are generally for health-related over the counter items, not general groceries. Some plans use a combined flex card, but groceries are only covered if your plan includes a food benefit wallet.
• Can one flex card be used for both healthy food and OTC items?
  Sometimes. Some Medicare Advantage plans combine multiple supplemental benefits into one card. Whether you can buy both categories depends on whether your plan loads both benefits onto the card.
• Why was my OTC card declined even though I had money left?
  Common reasons include buying an item that is not on the eligible list, shopping at a non-participating retailer, or trying to use the benefit outside the allowed ordering method (in-store vs online vs catalog).
• Do healthy food benefits and OTC benefits roll over each month?
  It depends on your plan. Some plans reload monthly or quarterly and unused funds may expire. Check your Evidence of Coverage or benefit portal for rollover and expiration rules.
• Is a healthy food benefit the same as SNAP or EBT?
  No. A Medicare Advantage healthy food benefit is a plan supplemental benefit with plan-specific rules. SNAP is a separate federal nutrition program with its own eligibility and purchasing rules.
• How do I find my plan’s eligible items list for an OTC card or healthy food card?
  Look in your plan’s benefit portal, OTC catalog, or Evidence of Coverage. If you cannot find it, call member services and ask for the “eligible items list” and “participating retailers.”

References

• https://www.medicare.gov/health-drug-plans/health-plans
• https://www.medicare.gov/publications/12026-understanding-medicare-advantage-plans.pdf
• https://www.hhs.gov/answers/medicare-and-medicaid/what-is-medicare-part-c/index.html
• https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/mc86c04.pdf
• https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-422/subpart-C/section-422.102
• https://www.cms.gov/medicare/health-plans/healthplansgeninfo/downloads/supplemental_benefits_chronically_ill_hpms_042419.pdf
• https://odphp.health.gov/foodismedicine/federal-resource-hub/medicare-advantage-health-plans
• https://www.cms.gov/priorities/innovation/media/document/vbid-cy2023-food-insecurity-use-case
• https://www.medpac.gov/wp-content/uploads/2025/06/Jun25_Ch2_MedPAC_Report_To_Congress_SEC.pdf
• https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2819557

This content is for education only and does not replace guidance from your local SNAP agency or EBT customer service. If you believe you’re experiencing active fraud or feel unsafe, contact local authorities right away.