Did your parents give you an “allowance” as a kid? Maybe this came in the form of chore money, or as a weekly or monthly cash prize — just because. Maybe you didn’t get an allowance yourself, but heard other kids talking about theirs at lunchtime or recess — and maybe you wish you had one.
Similarly, some Medicare Advantage plans, also called Medicare Part C, offer a variety of allowances, from food and groceries to transportation and wellness programs. Medicare allowances look a little different than the allowances your friends flaunted as kids, and must be used for particular health and wellness purposes. Still, they are financial bonuses — and you don’t need to complete any number of chores to receive them.
[Read: Medicare vs. Medicare Advantage: How to Choose.]
What Are Medicare Allowances?
Medicare Advantage plans cover a few extra health care costs that original Medicare doesn’t cover. Additionally, plans may offer extra perks, known as Medicare allowances, that cover nonmedical items or services that support your health, such as paying for groceries, glasses or hearing aids.
Dr. Kanwar Kelley, a board-certified otolaryngologist and cofounder and CEO of Side Health, explains that Medicare allowance benefits are typically “above and beyond” those available in basic Medicare, and can be advertised as enticements for people to sign up for Medicare Advantage.
Services offered through Medicare allowances differ by plan, depending on your carrier. Your carrier refers to the insurance company providing you with Medicare Advantage plans, such as UnitedHealthcare, Aetna or Humana. Carriers are required to meet certain standards when offering a Medicare Advantage plan, so basic benefits are relatively consistent from company to company. They have more freedom when divvying up Medicare allowances, however, so allowances can vary widely from carrier to carrier.
“That’s where you really have to get into the nitty gritty,” Kelley says, meaning do your homework in terms of shopping, comparing and contrasting individual Medicare Advantage plans.
Nicole Toneatti, a Columbus, Ohio-based licensed insurance agent with HealthMarkets Insurance Agency, says it can help to think of Medicare allowance offerings as a little something extra to help you with your health care costs — but perhaps not the most important reason you choose a carrier.
She says beneficiaries often prioritize a plan that keeps their doctors in-network and ensures easy access to their medications over the plan’s list of allowances — but not always.
“That can really vary based on need,” Toneatti says, adding that she’s seen clients “drop doctors for benefits before,” and will work with them to make these decisions if that’s what they want to do.
“It’s just a matter of having that conversation and saying, ‘OK, what is important to you?'” Toneatti says.
[READ: Does Medicare Cover Dental in 2025? Benefits and Eligibility]
Examples of Medicare Allowances
Common types of Medicare allowances offered include:
Medicare grocery allowances
Some Medicare Advantage plans offer a grocery allowance. With these, you usually get a card to pay for foods such as fruits and vegetables, frozen meals, fresh salad kits, dairy products, water and soup. You can’t use your card for items like alcohol, sugary and processed foods or pet food.
This allowance 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’s 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 allowance. 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 services 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.
Medicare wellness programs
Wellness programs were among the earliest perks offered by Medicare Advantage plans. One of the most recognizable of these wellness program 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.
“Giveback” allowances
In addition to offering allowances for specific services, some carriers provide “giveback” allowances that serve as payouts toward your yearly deductible. The amount of money that a carrier gives in a giveback can vary carrier to carrier. Depending on how you pay for your insurance, you’ll receive giveback funds as a credit on your monthly Social Security benefit or pay a reduced monthly amount for your Medicare plan.
Other allowances
Other types of allowances can include coverage for:
— Nonemergency transportation
— Meals
— Bathroom safety devices
— Eyewear
[Read: How to Choose the Best Medicare Advantage Plan]
Medicare Allowance Changes in 2025
Like other aspects of Medicare and Medicare Advantage plans, Medicare allowances have the potential to change year to year. Despite this, Toneatti says carriers tend to keep allowances relatively consistent — especially if they know beneficiaries are happy with their offerings.
That being said, you may have noticed some changes to Medicare allowances this year — many of which are unique to 2025. Some carriers adjusted their Medicare allowances in 2025 in response to the Inflation Reduction Act signed into law by former President Joe Biden, which significantly impacted the price of prescription drugs.
“With that huge change and cost reduction to the beneficiary — which was great — a lot of these companies had to reevaluate the ‘extras’ that they were offering,” Toneatti says. “So it came down to: If we want to stay in business, we have to really reallocate our funds.”
The act capped Medicare’s out-of-pocket prescription drug prices at $2,000 and effectively nullified Medicare Advantage’s “donut hole” gap for drug payments. In 2024, Medicare Advantage beneficiaries payed for prescription drugs until they met a $545 deductible — or, metaphorically, bit into the first side of a donut — and began receiving insurance coverage for these medications.
They continued receiving coverage while also paying an out-of-pocket copay until their total yearly medication costs reached $5,030 and they stopped receiving insurance coverage for drugs — or, metaphorically, bit past the first side of the donut and into its empty center: the donut hole.
Beneficiaries were then responsible for drug payments until their total yearly out-of-pocket drug costs reached $8,000 and Medicare Advantage stepped in to cover the rest — or, metaphorically, they finally bit into that second side of the donut.
Now in 2025, Medicare Advantage beneficiaries will need to meet a $590 deductible before their insurance covers their prescription drugs. Then, beneficiaries will pay a copay until their total out-of-pocket costs reach $2,000. While this change saves some beneficiaries thousands of dollars on medications, it also requires insurance carriers to spend more money on prescription drugs — and to think about how to save money elsewhere because of it.
According to an analysis by the Kaiser Family Foundation, 73% of plans are offering allowances for over-the-counter items in 2025, down from 85% in 2024. Additionally, 65% of 2025 plans are offering meal benefits compared with 72% in 2024, and 30% are offering transportation benefits for medical needs compared with 36% in 2024.
[7 Reasons to Switch Medicare Part D Plans]
Why Carriers Want You to Use Your Allowances
With the range of Medicare allowances on the market, there are likely some that will suit your needs better than others. And while it can be frustrating if a plan doesn’t offer an allowance that you are looking for, most carriers are trying to please you with their selections.
Toneatti explains that when Medicare Advantage beneficiaries actively use their plan’s allowances, those carriers can be awarded with a five-star Medicare rating. Not only does a five-star rating sound attractive, but reaching this status allows the carrier to open enrollment outside the regular period for existing Medicare Advantage beneficiaries. This means if you’re unhappy with your current plan, you may consider switching.
“So there is an incentive to make sure that the benefits that are being offered to the clientele and the beneficiary are something that they are going to use,” Toneatti says.
How to Choose the Medicare Allowances That Are Best for You
It can take time and research to choose a Medicare plan that is best for you — especially if you want to be diligent about selecting a plan with an attractive set of allowances. It’s possible to conduct this research on your own by going to Medicare.gov and taking a look at your options. However, it may be easier to ask for help in this process by leaning on the advice of a Medicare insurance broker.
“If you have a lot of time on your hands and you love going down rabbit holes — get at it,” Toneatti says. “If it is too much content, which it typically is, I would find yourself a local broker who can truly drill down the plans that are offered and (work with) your ‘wish list.'”
Don’t know where to begin? Search and compare Medicare Advantage plans with U.S. News & World Report’s Best Insurance Companies for Medicare Advantage ratings.
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Medicare Allowances Explained: Allowable Rates and Benefits originally appeared on usnews.com
Update 02/24/25: This story was published at an earlier date and has been updated with new information.
