Medicare OTC Benefit and Free Home Delivery: How It Works in 2026

What the Medicare OTC benefit is (and who offers it)

An OTC allowance is a supplemental, or extra, benefit. It gives you a fixed dollar amount to spend on approved over-the-counter (nonprescription) health and wellness products. It is not a government program and it is not the same for everyone.

Only some Medicare Advantage (Part C) plans offer it. Medicare Advantage plans are sold by private insurers and can include benefits that Original Medicare does not, such as vision, hearing, dental, and an OTC allowance. Because each plan designs its own benefits, the OTC allowance amount, the list of eligible items, and the way you shop can differ from one plan to the next.

Does Original Medicare or Part D cover OTC items?

No. Original Medicare (Part A and Part B) does not cover over-the-counter medicines or health items. These are not covered services, so if you have only Original Medicare you pay for them yourself.

Medicare Part D (prescription drug coverage) does not cover OTC drugs either. By law, a Part D drug is one that can be dispensed only with a prescription, so nonprescription products do not qualify. This is why an OTC allowance only ever shows up as an extra benefit in a Medicare Advantage plan, not in Original Medicare or a standalone Part D plan.

How the allowance works: card, benefit period, and rollover

When a plan includes the benefit, it loads a dollar amount onto a plan-issued prepaid card or account. The allowance is usually available on the first day of each benefit period, which is commonly monthly or quarterly depending on the plan.

The allowance is generally use-it-or-lose-it. Unused money usually does not carry over to the next month, quarter, or year unless your specific plan allows limited rollover. The exact amount varies widely by plan, so check the plan's own materials for the dollar figure, the schedule, and whether any rollover applies.

• Allowance is loaded onto a plan card or account, not paid to you as cash.
• Refills typically at the start of each benefit period (often monthly or quarterly).
• Generally no rollover - spend it within the period unless your plan says otherwise.
• The dollar amount is set by each plan and is not standardized.

What you can buy and how free home delivery works

Eligible items are nonprescription health and wellness products. The exact catalog is set by each plan, but commonly covered categories include cold, flu, and allergy medicine; pain relievers; dental care; eye and ear care; first-aid and medical supplies; sunscreen; and vitamins.

Many plans let you order eligible items online, by phone, or by mail through the plan's OTC partner and have them shipped to your home at no added cost. Free delivery is a common feature, but it is set by the plan and its partner, so confirm with your plan whether shipping is free and whether you can also shop in person.

You generally cannot withdraw the allowance as cash or spend it on non-health items. It is restricted to the approved catalog. Whether your card works at a regular retail store or only through the plan's mail-order catalog depends entirely on the plan - some allow in-store use at participating retailers, others are catalog and mail-order only.

• Common eligible items: cold/flu/allergy medicine, pain relievers, dental care, eye/ear care, first-aid and medical supplies, sunscreen, vitamins.
• Order channels often include online, phone, and mail.
• Home delivery is frequently free, but confirm with your plan.
• Not for cash withdrawal or non-health purchases.

Which 2026 plans include it, and is it changing?

The OTC benefit is common but not universal, and its reach is shrinking. In 2026, an estimated 66% of individual Medicare Advantage plans offer an OTC allowance, down from 73% in 2025. Among Special Needs Plans (SNPs), which serve people with specific conditions or limited income, 94% offer an OTC allowance in 2026.

Because availability and amounts change every year, you should not assume your plan will keep the same OTC benefit. Review your plan's Annual Notice of Change and compare plans during Medicare's enrollment periods. You can compare Medicare Advantage plans, including their extra benefits, using the official Plan Finder at Medicare.gov.

You still pay your regular Medicare costs

An OTC allowance does not replace or reduce your normal Medicare costs. If you enroll in a Medicare Advantage plan for the OTC benefit, you still owe the 2026 Part B standard premium of $202.90 per month, plus any premium the plan itself charges.

Higher-income beneficiaries also pay an income-related surcharge (IRMAA) on top of the Part B premium, regardless of extra benefits like OTC. In 2026, IRMAA applies above a modified adjusted gross income of $109,000 for a single filer or $218,000 for a joint return (based on 2024 income), and the total Part B amount ranges from $284.10 to $689.90 per month at those higher income levels.

In short, the OTC allowance is a nice extra, but choose a plan based on its full set of costs and coverage, not the OTC perk alone.