Plain-language guide to HUD’s flex card rules for seniors on rental assistance

Content

Why flex cards matter if you live in HUD housing
What Medicare Advantage flex cards are and how they work
HUD income rules for Medicare flex cards
When flex card dollars count as income
When flex card dollars do not count as income
Do you report a Medicare food card to the housing authority
Scripts for talking with your housing worker
What to do if your rent went up because of a flex card
How advocates and care coordinators can help
Frequently asked questions (FAQ)
References

Introduction

If you live in HUD-assisted housing and have a Medicare Advantage plan that gives you a flex card or “Medicare food card,” you are not alone in wondering how it affects your rent. Many older adults have been told their rent will go up just because they receive a card, even when they only use it for groceries or over the counter medicines.

This guide explains, in everyday language, what HUD says about Medicare Advantage flex cards, when those dollars really do count as income, and what you can do if your rent was increased by mistake. It is written for people in public housing, Housing Choice Vouchers (Section 8), and project-based senior housing, as well as caregivers who help them.

This information is based on official HUD rules about “annual income” and HUD’s January 2025 Frequently Asked Questions about Medicare Advantage supplemental benefits and flex cards.

This article is for education only and does not replace legal advice about your specific situation.

Why flex cards matter if you live in HUD housing

Many Medicare Advantage plans now offer “flex cards,” “Medicare food cards,” or similar prepaid cards. These cards can help with groceries, over the counter medicines, dental or vision costs, transportation, or even certain household expenses.

At the same time, HUD housing programs use your “annual income” to decide:

• Whether you qualify for public housing, Section 8, or project-based housing
• How much rent you are expected to pay

Because your rent is tied to your income, you might worry that any new benefit will automatically raise your rent.

HUD’s new guidance explains that most Medicare flex card benefits do not count as income for HUD rent calculations. Only certain uses of the card can affect your rent.

Understanding the rules can help you:

• Decide what to report
• Talk confidently with your housing worker
• Ask for a correction if your rent went up by mistake

What Medicare Advantage flex cards are and how they work

What is a Medicare Advantage flex card

Medicare Advantage (Part C) plans are Medicare-approved health plans offered by private insurance companies that provide your Part A and Part B benefits instead of Original Medicare, and most include prescription drug coverage. Some plans also include extra “supplemental benefits.”

Flex cards are one way these plans deliver supplemental benefits. They are typically:

• Preloaded debit or payment cards
• Limited to certain types of purchases, such as groceries, over the counter medicines, transportation, or utilities
• “Use it or lose it,” meaning unused amounts may expire at the end of the month or plan year

Consumer advocates describe flex cards as essentially preloaded debit cards used by many Medicare Advantage plans to provide certain supplemental benefits.

Who gets flex cards

You might get a flex card if:

• You are enrolled in a Medicare Advantage plan that offers extra benefits for food, utilities, or other health related items
• Your plan sends you a card in the mail with instructions on how and where you can use it

Each plan sets its own rules about:

• How much is loaded on the card
• Where you can spend it
• Which categories are allowed (for example, “food and produce,” “utilities,” or “dental services”)

Why this matters for HUD-assisted tenants

HUD’s income rules apply to people receiving rental assistance through programs such as:

• Public housing
• Housing Choice Voucher (Section 8)
• Project-based Section 8 and other HUD-assisted multifamily housing

These programs all use a federal definition of “annual income,” found in HUD’s regulations at 24 CFR 5.609.

HUD’s 2025 FAQ explains how Medicare Advantage supplemental benefits, including flex cards, fit into those income rules.

HUD income rules for Medicare flex cards

General HUD rule about income

Under HUD rules, annual income includes almost all amounts that adults in the household receive, unless they are specifically excluded in the regulation.

Annual income does not include:

• Amounts that are for, or in reimbursement of, health and medical care expenses for any family member
• Certain other excluded categories listed in 24 CFR 5.609(b)

This is important, because many flex card purchases are for health and medical needs or other supplemental benefits, not for rent.

HUD’s special guidance about Medicare Advantage flex cards

In January 2025, HUD issued a Frequently Asked Questions document on “HUD-assisted Housing and Medicare Advantage Supplemental Benefits.” The FAQ explains:

• If you use Medicare Advantage supplemental benefits (including flex cards) to pay for rent or utilities, the amount actually used for rent and utilities must be counted as income.
• All other Medicare Advantage supplemental benefits, including amounts used for health related items, groceries, or transportation, are excluded from income under the rule that covers health and medical care reimbursements and similar benefits.
• Any unused flex card dollars that expire at the end of the month or year are not counted as income.

HUD also notes that the vast majority of Medicare Advantage supplemental benefits will be excluded from income and will not need to be verified.

In other words, HUD has set clear Medicare flex card HUD income rules: only the portion of your flex card that is actually used to pay rent or utilities should affect your rent calculation.

When flex card dollars count as income

HUD’s FAQ gives specific examples to show when flex card benefits do count as income.

Flex card dollars are counted as income when:

• You receive a Medicare Advantage flex card that can be used for rent or utilities
• You actually use the card to pay for rent or utility bills that your housing provider counts when setting your rent

In that case:

• Only the dollar amount you use for rent and utilities is counted as income
• The rest of the card value that you use for other allowed purposes stays excluded

Example

• Your plan loads 100 dollars per month on your flex card.
• You use 40 dollars to help pay your electric bill and 60 dollars on groceries.
• Under HUD’s rules, the 40 dollars used for utilities is counted as income.
• The 60 dollars used for groceries is not counted as income.

Key points

• Your housing provider should not count the full face value of the card if you only use part of it for rent or utilities.
• They should count only the amount actually used for rent or utilities.

When flex card dollars do not count as income

Flex card benefits do not count as income for HUD rent calculations when:

• You only use the card for groceries, over the counter medicines, toiletries, or similar household items
• You use the card for health related services, like dental care or eyeglasses that qualify as medical expenses
• You use the card for transportation to medical appointments
• Some or all of the card amount expires unused at the end of the month or plan year

HUD’s FAQ states that any benefits on a flex card used for purposes other than rent and utilities, or unused benefits that are lost at the end of the benefit period, should not be counted in the family’s annual income.

This means that if your “Medicare food card” is only used for groceries and you never use it to pay rent or utility bills, those benefits should not change your HUD rent.

Do you report a Medicare food card to the housing authority

Many people ask, “Do I report a Medicare food card to the housing authority?” The answer depends on how the benefit is used and local practices, but HUD gives some important guidance.

HUD tells housing providers that:

• The vast majority of Medicare Advantage supplemental benefits will be excluded from income.
• Benefits on flex cards that are used for anything other than rent and utilities generally do not need to be verified.
• Housing providers should generally assume flex card benefits have not been used to pay rent or utilities unless:
  • They have information suggesting otherwise, or
  • The beneficiary has said they receive and have used, or will use, the benefit for rent or utilities.
• Beneficiaries should not be expected to keep receipts for every flex card purchase or to get detailed records from card vendors.

In practice, this means:

• If you never use the card for rent or utilities, HUD expects housing providers to assume the benefit is excluded from income.
• If you do use the card for rent or utilities, you should report that use, because those amounts count as income.

If you are unsure what your local housing authority expects, you can still tell them about the card in a simple, clear way that explains how you use it. The scripts below can help.

Scripts for talking with your housing worker

It can feel intimidating to bring up income questions with a housing worker, especially if you are worried about losing your home. Having words prepared ahead of time can make these conversations easier.

You can adjust any of these scripts to match your situation, and you can bring a trusted person, like a family member, caregiver, or advocate, to help you.

Script 1: Letting your worker know you have a flex card that you do not use for rent

You can say:

• “I want to make sure my rent is calculated correctly. I am in a Medicare Advantage plan that gives me a flex card, sometimes called a Medicare food card. I only use this card for groceries and medical items, not for my rent or utility bills.”
• “HUD’s guidance says that flex card benefits that are not used for rent or utilities should not be counted as income. I want to confirm that my card is being treated that way.”
• “Could we please make a note in my file that this benefit is not used to pay my rent or utilities?”

Script 2: If your rent went up because of a flex card

If you receive a notice saying your rent is going up because of your flex card, you might say:

• “I received a rent increase notice that says my Medicare flex card is being counted as income. I believe this may not follow HUD’s most recent guidance.”
• “My understanding is that only the portion of a flex card used to pay rent or utilities should count as income, and that benefits used for groceries or health items, or benefits that expire unused, should be excluded.”
• “I use my flex card only for [groceries and medicines / other non-rent items]. Could we review my income calculation together and see if an adjustment is needed?”

If you do use the card to help with a utility bill, you can be specific:

• “I sometimes use about 20 dollars each month from my flex card for my electric bill. The rest is for groceries. I believe only the part used for utilities should be counted as income, not the full value of the card.”

Script 3: If your worker is unsure about the rules

If your worker has not seen the new HUD guidance, you can say:

• “I know these rules are complicated. HUD issued a Frequently Asked Questions document in January 2025 about how Medicare Advantage flex cards should be treated. It explains that only benefits used for rent and utilities are counted in income.”
• “Would you be open to looking at that HUD FAQ together, or could someone in your office review it and let me know how it applies to my case?”

You can bring a printed copy of the HUD FAQ, or ask a family member, advocate, or a service like Understood Care’s Application Help to help you print and organize your documents.

What to do if your rent went up because of a flex card

If you think your rent was incorrectly increased because of a Medicare flex card, you are allowed to ask questions and request a review. Here are practical steps.

1. Gather your papers

Collect:

• Your most recent rent notice or “rent change” letter
• Any income worksheet the housing authority gave you (sometimes called a “verification summary”)
• Any letters or statements from your Medicare Advantage plan that explain what the flex card can be used for
• Notes about how you actually use the card (for example, “only groceries and over the counter medicines”)

Write down:

• When your rent went up
• Who you spoke with
• What they told you about why the flex card was counted

2. Ask for a clear explanation in writing

You can request a written explanation of how your flex card was treated, for example:

• “Could you please give me a written explanation of how my Medicare Advantage flex card was counted in my annual income, including the amount you counted and the reason?”

This can help you see whether:

• They counted the entire card amount as income
• They counted only an amount used for rent and utilities
• They may not have understood HUD’s Medicare flex card HUD income rules

3. Share HUD’s guidance

Bring or send a copy of the HUD FAQ along with a simple note, such as:

• “The HUD FAQ on Medicare Advantage Supplemental Benefits, January 2025, says that only benefits used to pay rent and utilities should be included in income, and that benefits used for other purposes or that expire unused should not be counted.”

Explain how you use the card:

• “I do not use my flex card to pay any rent or utilities.”
• “I sometimes use 20 dollars for my electric bill, but the rest is for groceries.”

Ask if they can:

• Remove any flex card amounts that should not have been counted
• Recalculate your rent based on the correct income amount
• Apply any corrections retroactively if you overpaid

4. Use the housing program’s review or grievance process

Most HUD housing programs have a process to challenge rent calculations or other decisions, often called:

• An “informal hearing” (common in Housing Choice Voucher programs)
• A “grievance” or “resident grievance procedure” (common in public housing)

Check your lease, your admissions and continued occupancy policy, or the information packet you received when you moved in.

You can say:

• “I would like to use the grievance or hearing process to review my rent calculation related to my Medicare flex card.”

Bring your documents and, if possible, a trusted support person or advocate.

5. Get outside help if needed

If the issue is not resolved or feels overwhelming, you can seek help from:

• A local legal aid or legal services office that handles housing or public benefits issues
• A senior legal hotline in your state
• A local HUD-approved housing counseling agency
• Your local HUD Field Office, which HUD directs people to contact with questions about the Medicare Advantage supplemental benefits guidance

Understood Care advocates can also help you organize records, understand letters, and prepare to talk with your housing worker or a legal aid office. See the “How advocates can help” section below.

How advocates and care coordinators can help

These rules sit at the intersection of Medicare and HUD housing, which can be confusing even for professionals. It is reasonable to need support.

Understood Care advocates can help you:

• Review letters from your Medicare Advantage plan and your housing authority
• Organize income documents and benefit explanations before a recertification
• Practice conversations with your housing worker using the scripts in this article
• Prepare questions for legal aid or another housing expert

If you want more hands-on support, you can connect with services such as:

• Application Help for help completing forms, gathering documentation, and understanding benefit letters
• Analyze Bills for help reviewing medical and insurance statements that may interact with your budget
• Care Coordination for ongoing support connecting your medical care, benefits, and housing needs

These services can be especially helpful if you are balancing multiple conditions, caregiving responsibilities, or memory challenges.

Frequently asked questions about flex cards and HUD income rules

• Are Medicare flex card benefits counted as income for HUD housing?
  For most older adults in HUD-assisted housing, flex card benefits are not counted as income. HUD says that only the part of a Medicare Advantage supplemental benefit that is actually used to pay rent or utilities must be included in income. Benefits used for groceries, health related items, or other non-rent purposes, as well as unused amounts that expire, should be excluded from income.
• Do I report a Medicare food card to the housing authority?
  If you never use your Medicare food card or flex card to pay rent or utilities, HUD expects housing providers to assume the benefit is excluded and does not need to be verified. If you do use any part of the card to pay rent or utilities, you should report that use, because those dollars count as income. If you are unsure, you can tell your housing worker that you have the card and clearly explain how you use it, using the scripts in this guide.
• My rent went up because of flex card. What can I do?
  Start by asking for a written explanation of how the flex card was counted in your income. Compare that with HUD’s rules, which say that only amounts used for rent and utilities should be included. If your housing provider counted the full card amount even though you do not use it for rent or utilities, you can request a correction and, if needed, use the grievance or hearing process. It may also help to contact legal aid, a housing counselor, or a HUD Field Office, and to bring a copy of HUD’s 2025 Medicare Advantage Supplemental Benefits FAQ.
• Do flex cards affect my eligibility for Section 8 or public housing?
  Flex cards that are not used for rent or utilities should not affect your eligibility, because they are excluded from income under HUD’s rules for health and medical reimbursements and similar benefits. Only the portion used to pay rent or utilities could affect your counted income. If you are worried, you can ask your housing worker to show where, if at all, flex card amounts appear in your income calculation.
• What if my flex card can be used for rent or utilities but I never use it that way?
  Some flex cards technically allow rent or utility payments, but you might choose to use them only for groceries or medical items. HUD’s FAQ says that any benefits administered through a flex card that are not used for rent and utilities, as well as unused amounts that expire, should be excluded from income. It is the actual use, not just the potential categories, that matters for income calculations.
• Can my housing worker ask for all my grocery or pharmacy receipts from my flex card?
  HUD has told housing providers that beneficiaries should not be expected to keep a record of all flex card purchases and may not be able to get detailed vendor records. Because only benefits used for rent and utilities are relevant for income, housing providers are instructed to generally assume flex card benefits were not used for rent or utilities unless they have information suggesting otherwise or you have said you used them that way.
• Where can I get more help understanding Medicare flex card HUD income rules?
  You can:
  • Ask your housing authority or property manager to review HUD’s 2025 FAQ on Medicare Advantage Supplemental Benefits
  • Contact your local HUD Field Office with questions
  • Reach out to a local legal aid program or senior legal hotline
  • Work with an advocate through services like Understood Care’s Application Help or Care Coordination to prepare documents and questions before you meet with your housing worker

References

• U.S. Department of Housing and Urban Development. Frequently Asked Questions (FAQ): HUD-assisted Housing and Medicare Advantage Supplemental Benefits. January 2025.
  https://www.huduser.gov/portal/portal/sites/default/files/pdf/FAQ-Medicare-Advantage-Supplemental-Benefits.pdf
• U.S. Department of Housing and Urban Development. 24 CFR 5.609 Annual income. Electronic Code of Federal Regulations.
  https://www.ecfr.gov/current/title-24/part-5/section-5.609
• U.S. Department of Housing and Urban Development. Income and Income Exclusions Resource Sheet. HOTMA Income and Assets Training Series.
  https://files.hudexchange.info/resources/documents/Income-and-Exclusions-Resource-Sheet.pdf
• Center for Medicare Advocacy. New Medicare Advantage Flex Card Guidance Will Assist Enrollees Who Rely on Housing Benefits. 2025.
  https://medicareadvocacy.org/new-medicare-advantage-flex-card-guidance-will-assist-enrollees-who-rely-on-housing-benefits/
• Center for Medicare Advocacy. Issue Brief | Medicare Advantage “Flex Cards” Update. 2025.
  https://medicareadvocacy.org/issue-brief-medicare-advantage-flex-cards-update/
• Medicare.gov. Medicare Advantage & other health plans.
  https://www.medicare.gov/health-drug-plans/health-plans
• Understood Care. Application Help.
  https://understoodcare.com/care-types/application-help
• Understood Care. Analyze Bills.
  https://understoodcare.com/care-types/analyze-bills
• Understood Care. Care Coordination.
  https://understoodcare.com/care-types/care-coordination

This content is for education only and does not replace legal advice or personalized guidance from your housing authority, legal aid program, or other qualified professionals.