Medicare Allowance Explained: What You Need to Know

Medicare is a federal health insurance program, but many people are unaware that by taking the time to explore your options, you could get some extras from your plan. Some programs even provide food, fitness and other perks to eligible members.


You probably have seen television commercials featuring celebrities like Joe Namath and William Shatner touting Medicare Advantage plans, also called Medicare Part C. According to The Kaiser Family Foundation, these plans are chosen by 48% of Medicare beneficiaries.

One reason these plans are so popular is that they offer a variety of allowances, from food and groceries to transportation and wellness programs. However, as Diane Omdahl, RN, MS, president and co-founder of the Medicare consulting firm 65 Incorporated and author of “Medicare for You: A Smart Person’s Guide,” explains, there are limits on these allowances.

[SEE: The Best and Most Unique Nursing Home Activities for Seniors]

Medicare Grocery Allowances

Some Medicare Advantage plans offer grocery benefits. With these programs, you usually get a card to pay for “healthy” foods such as fruits and vegetables, frozen meals, fresh salad kits, dairy products, water and soup. You can’t use your card for things like alcohol, sugary and processed foods or pet food. Foods that are covered, and the monthly amount varies by insurer, but typically ranges from $25 to $275.

This benefit amount doesn’t roll over from month to month, so you need to use all of it in that month, or you will lose it. It is also important to note that you may not be able to use your card at all stores, so you need to find out where to shop with this benefit. Your plan can provide you with a list of eligible stores. At the same time, some plans will enable you to use your card for things like home-delivered meals, such as after surgery or a hospital stay.

Grocery allowances are most commonly offered with Medicare Special Needs plans. To qualify, you likely will need to undertake an annual wellness visit, complete a health risk assessment and provide documentation of a specific condition. Among the conditions that may qualify you for a food allowance card are arthritis, autoimmune disease, coronary artery disease, depression, diabetes, end-stage liver disease and obesity.

[SEE: 11 Red Flags to Look for When Choosing a Nursing Home.]

Medicare Wellness Programs

Wellness benefits were among the earliest perks offered by Medicare Advantage plans. “These were initially designed to promote enrollment,” said Omdahl. Perhaps the most recognizable is the SilverSneakers program, which allows Medicare Advantage members to choose a participating fitness center and enjoy equipment and classes. They also sometimes provide at-home workout kits.

Many Medicare Advantage plans also offer some coverage for dental care, eyewear and hearing aids. However, Omdahl suggests not counting on this coverage for all of these expenses. Find out what is covered and what limitations are involved before you join a plan and be aware that these benefits may change from year to year.

[SEE: 11 Foods Not to Mix With Prescription Medications.]

Other Options

Some plans offer other allowances. For instance, some may cover nonemergency transportation. This usually includes travel to and from a doctor’s office and some plans even cover Uber or Lyft trips to and from fitness centers or other health-promoting venues.

All Medicare Advantage plans provide some coverage for home health care. Coverage varies from plan to plan, but generally, you will need to receive care from a home health agency. There are typically agencies that contract with your plan and get authorization or a referral from your plan in advance.

Before signing up for any plan, you should get more information about your potential home health care needs. Ask questions such as:

— How many visits are covered and over what time period?

— Can a home health aide do more than medically related tasks (such as providing custodial care or helping with household chores)?

— What copay will you be responsible for?

Some Medicare Advantage plans offer telehealth benefits, including the option for telemedicine visits with specialists. Again, this offering varies from plan to plan, so knowing what you’re getting is crucial before you join a plan.

How Do I Get These Allowances?

You need a Medicare Advantage plan to get these allowances. Medicare Advantage plans are administered through a private health care plan, funded by the federal government and must provide the same benefits offered by original Medicare

Medicare-approved private companies offer these plans, which have a limit on what you will pay out-of-pocket for services every year. The most common types of Medicare Advantage Plans are:

— Health Maintenance Organizations or HMOs

— Preferred Provider Organizations or PPOs

— Special Needs Plans or SNPs

Health Maintenance Organizations or HMOs

These plans generally cover services provided by physicians, other practitioners and hospitals in the plan’s network. You can usually go out of network to receive care, but you may have to pay some or all of the cost for those services. The only exceptions are emergency care, out-of-area urgent care and temporary out-of-area dialysis within the U.S. You will need to choose a preferred provider in the plan and will need a referral from your primary care physician to see a specialist.

Most HMO Medicare Advantage plans cover prescription drugs, but it will be important to find out which particular medications are covered, especially if you are currently taking any medications. You can find this information in your health plan’s formulary, which might change each year.

Preferred Provider Organizations or PPOs

In truth, HMOs and PPOs are similar. For instance, PPOs have a network of practitioners and hospitals like HMOs. However, PPOs have more allowances for going out of network for care, so you can expect to pay a higher monthly premium than for an HMO in exchange for that greater flexibility. Unlike HMOs, you won’t need to select a primary care physician with a PPO, and you can see most specialists without a referral.

Most PPOs cover prescription drugs. It is important to find out about this before you enroll because if you join a PPO without drug coverage, you can’t enroll in a Medicare Part D drug plan. Only original Medicare members are eligible for Part D enrollment.

Special Needs Plans or SNPs

Medicare Advantage SNPs restrict membership to people who have specific diseases or characteristics, such as those who have diabetes or those who need skilled nursing care. These plans customize things such as benefits and drug formularies to the members’ needs. Some of these plans cover out-of-network services and providers and all provide a prescription drug plan.

While some Special Needs plans don’t mandate that you use in-network providers, you will need to ensure that any provider you use accepts Medicare.

Do Your Homework

Each Medicare allowance has different criteria and requirements, so it’s important to do your research and understand precisely what each covers.

You can find ratings of Medicare Advantage plans from the National Committee for Quality Assurance. You can also get help via phone or in person from your State Health Insurance Assistance Programs. Those agencies often maintain office hours at senior centers or other locations.

More from U.S. News

Essential Exercises for Men: Your Daily Fitness Routine

The Best Anti-Inflammatory Foods

Examining the Healthiness of Common Habits

Medicare Allowance Explained: What You Need to Know originally appeared on

Update 06/08/23: This story was previously published at an earlier date and has been updated with new information.

Federal News Network Logo

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up