How merchant category codes affect what your Medicare Advantage food card will approve

Introduction

If you have a Medicare Advantage food card (sometimes called a healthy food benefit card or grocery benefit card), it can feel confusing when it works at one checkout but gets declined at another. A big reason is something most people never hear about until a card is declined: merchant category codes, often shortened to MCCs.

An MCC is a behind-the-scenes code that helps a card system recognize what kind of business a store is. Many benefit cards use MCC rules to decide whether a purchase is allowed at a specific merchant.

This guide explains MCCs in plain language, how they can affect approvals, and what you can do to shop with fewer surprises.

Content

• What your Medicare Advantage food card benefit is
• What a merchant category code is
• How MCCs influence approvals at checkout
• Common “declined” situations and practical fixes
• Tips to avoid problems before you shop
• Tips for caregivers
• When to call your plan or card administrator
• Related Understood Care resources
• FAQ
• References

What your Medicare Advantage food card benefit is

Medicare Advantage (Part C) plans are offered by private companies that must follow Medicare rules, and many plans offer extra benefits beyond Original Medicare.

Where the “food and produce” benefit comes from

CMS has stated that food and produce may be offered as Special Supplemental Benefits for the Chronically Ill (SSBCI) when it is intended to help eligible members meet nutritional needs, and CMS also notes that tobacco and alcohol are not permitted under that “food and produce” SSBCI example.

Because these benefits are plan-designed, the exact rules can differ a lot from one plan to another, even within the same insurance company.

Why the rules can feel strict

Many people expect a food card to behave like a normal debit card. In reality, these are benefit programs with specific rules about:

• Who qualifies
• Where the benefit can be used
• What items count as eligible
• When funds load and whether unused funds expire

Plans offering SSBCI also have requirements around eligibility documentation and evidence expectations for the benefit.

What a merchant category code is

A merchant category code (MCC) is a code that categorizes a business based on its primary line of business. In card processing systems, MCCs can be used to authorize or decline transactions based on preset controls.

The simplest way to think about MCCs

When your card is used, the payment system does not “see” a store the way you do. It sees data about that merchant, including a category code that roughly answers:
“What type of merchant is this?”

That is why two places that both sell groceries can behave differently at checkout.

Why the code is not always what the store looks like

A store’s MCC can sometimes surprise you because:

• A large retailer may code as a “discount store” or “warehouse club,” not a grocery store.
• A store-within-a-store (like a pharmacy counter inside a larger store) may run through a different merchant setup.
• Online checkout can route through a different merchant category than in-store checkout.
• Different locations of the same chain can sometimes be set up differently.

Government purchase-card guidance describes MCCs as reflecting the merchant’s primary business and explains that MCC-based controls can be used to approve or decline transactions.

How MCCs influence approvals at checkout

Most benefit cards rely on one or both of these control types:

• Merchant-level controls (is this an allowed type of store?)
• Item-level controls (are these specific items eligible?)

What happens when you swipe or scan the card

A simplified view looks like this:

1. The register sends a transaction request that includes the merchant’s information (including category coding).
2. The card system checks whether that merchant fits the allowed rules (often using MCC).
3. If the merchant is allowed, the system may also check whether the items you are buying are eligible (depending on the program design).
4. The system approves or declines, sometimes approving only part of the total if partial approval is supported.

Merchant-level approval: “Is this store type allowed?”

Some card programs use MCC rules specifically because they are a scalable way to control where a card can be used. Official guidance on merchant controls explains that MCCs can be used in a card processing system to authorize or decline transactions.

This is why a benefit card may be accepted at one grocery store but declined at a convenience store, a gas station, or a big-box retailer, even if those places sell food.

Item-level approval: “Are these items eligible?”

CMS guidance for OTC benefits describes a debit card approach that is “electronically linked” to eligible items, and it also discusses reimbursement as an approach in some cases.

Food benefits may use similar concepts. Even if the merchant is allowed, the card may still reject:

• Alcohol and tobacco (CMS specifically notes these are not permitted in the food and produce SSBCI example).
• Non-food items
• Prepared foods or hot bar items, depending on plan rules
• Delivery fees or service charges, depending on how the plan defines eligible spending

Why the same chain can work at one location but not another

This is one of the most frustrating situations, and MCCs are a common reason:

• One location may be categorized as a grocery merchant.
• Another location may be categorized under a different primary business category.
• A separate checkout system (pharmacy vs general merchandise) may route through a different merchant setup.

The practical takeaway: if your card works at Store A but not Store B, it is not automatically your fault and it does not necessarily mean you bought the wrong items.

Common “declined” situations and practical fixes

If your card is declined, these are common patterns that match how MCC and item controls work.

• The store is not an approved merchant type
  Try: Use your plan’s store locator or approved retailer list, then test with a small purchase first.
• The store sells groceries, but its primary category is not “grocery”
  Try: Ask the card administrator whether that location is coded in a way your benefit allows. You can also try a different location of the same chain.
• Mixed basket problem
  Try: Separate your transaction into two purchases. Put clearly eligible foods in one transaction and everything else in another.
• The checkout lane matters
  Try: If you are in a store with a separate pharmacy checkout, try the main grocery lanes (or the reverse). Some systems are set up differently.
• Online ordering or delivery does not work
  Try: Use in-store checkout first. If your plan allows online ordering, use the plan’s recommended portal or method.
• Not enough balance, funds not loaded, or funds expired
  Try: Check your balance right before you shop. If funds expire monthly or quarterly, timing matters.
• The card system is having a temporary issue
  Try: Save the receipt and ask about reimbursement options if your plan offers them. CMS describes that some benefit designs include reimbursement processes in certain circumstances.

Tips to avoid problems before you shop

A little prep can prevent most checkout surprises.

Before you go

• Find out the exact name of your benefit (food and produce, healthy foods, grocery allowance, flex wallet, combined card).
• Confirm whether your benefit is SSBCI-targeted (meaning not everyone in the plan qualifies).
• Use your plan’s approved retailer list and eligible item guidance.
• Check your available balance.

At the store

• Start with a small “test basket” of clearly eligible items.
• Keep items simple at first: fruits, vegetables, and basic staples are commonly included when a plan offers food and produce support.
• If your card declines, do not keep adding items and retrying. Separate transactions instead.

For ongoing success

• Save a short list of “known good” stores and “known good” items for your plan.
• If you are a caregiver, write down what works so the person you help does not have to relearn it every month.

Tips for caregivers

If you are helping a parent, spouse, or older adult:

• Keep a photo of the card and the customer service number on your phone.
• Do the first grocery trip together so you can learn the plan’s rules in real time.
• Create a simple shopping list of items that are consistently approved.
• If the person you help also has an OTC benefit, remember that the card may have multiple “wallets” with different rules.

When to call your plan or card administrator

If you want the fastest path to an answer, ask targeted questions that match how MCC and item controls work.

• Can you confirm which merchants are approved for my food benefit?
• Is this benefit restricted by merchant category codes?
• This store location is being declined. Can you tell me whether its merchant category is excluded?
• Is the benefit item-level restricted, or only store-level restricted?
• Do you allow partial approvals, or will one ineligible item decline the whole transaction?
• If the network is down or the card fails incorrectly, is reimbursement available and what documentation do you need?

Related Understood Care resources

• https://understoodcare.com/uc-articles/healthy-food-benefit-vs-otc-card-whats-the-difference
• https://understoodcare.com/uc-articles/can-you-use-a-medicare-flex-card-for-grocery-delivery-instacart-walmart-amazon
• 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

FAQ

• What is a merchant category code (MCC)?
  It is a code used in card payment systems to categorize a business by its primary type, and it can be used to approve or decline transactions based on preset rules.
• Why is my Medicare Advantage food card declined at a store that sells groceries?
  The store may be categorized under a different merchant type than your benefit allows, or your basket may include items your plan does not treat as eligible.
• Can two locations of the same store approve differently?
  Yes. Locations can be set up differently in payment systems, and the merchant categorization used for approvals can differ.
• Do Medicare Advantage food cards only cover “healthy” items?
  Plans set the exact list. CMS has described food and produce as an example SSBCI benefit to help meet nutritional needs and notes that tobacco and alcohol are not permitted in that example.
• Is a Medicare Advantage food card the same as an OTC card?
  Not always. Some plans use one combined card for multiple benefits, but each benefit can have its own rules, retailers, and eligible items.
• What should I do first if my food card is declined at checkout?
  Separate eligible foods into their own transaction, confirm the store is on your plan’s approved list, and call the number on the back of the card if the decline continues.
• Can my plan offer reimbursement if the card fails?
  Some benefit designs include reimbursement approaches in certain situations. Your plan can tell you whether reimbursement applies to your specific benefit and what documentation is required.

References

• https://www.medicare.gov/publications/12026-understanding-medicare-advantage-plans.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://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/mc86c04.pdf
• https://www.cms.gov/newsroom/fact-sheets/contract-year-2025-medicare-advantage-and-part-d-final-rule-cms-4205-f
• https://login.acquisition.gov/afars/14-6.-merchant-authorization-controls-mac
• https://smartpay.gsa.gov/merchants/vendor-guide/

This information is for general education and does not replace medical advice from your own clinicians or care team. If you are considering PACE or have questions about PACE program food benefits, talk directly with your local PACE organization or a trusted advocate.