Every three months, John Holland’s health insurance plan reloads a debit card with $50 to buy toothpaste, Band-Aids and sunscreen, among other items.
The plan also deposits $300 a year into his online “wellness wallet,” which he can use toward the purchase of acupuncture treatments, Weight Watchers classes and sporting goods such as exercise equipment, pickleball paddles — even a kayak or canoe.
Mr. Holland, who lives in Gorham, Maine, prefers going to the gym, which his plan, from the health care nonprofit Martin’s Point, pays for. “They’re trying to keep you healthy, keep you moving,” he said.
Mr. Holland, 78, is one of nearly 35.5 million people who have chosen Medicare Advantage, the plans sold by commercial health insurers, over the traditional government-run Medicare program, which provides health insurance to adults who are 65 and older or disabled.
But since the first Trump administration gave insurers huge leeway in 2019 to offer extra benefits not covered by traditional Medicare, officials have signaled things have gone a little too far. They are fine-tuning some restrictions.
“C.M.S. guidelines were very broad in the beginning,” said David Lipschutz, co-director the Center for Medicare Advocacy. “As plans get more creative and try to entice enrollees with new benefits, C.M.S. is making judgment calls about what complies with the law.”
The federal government pays the commercial insurers a set monthly amount for each member to cover everything Medicare does, and a host of extras. The plans will receive nearly $615 billion this year, or about $76 billion more than the government pays to care for similar patients in traditional Medicare, according to the Medicare Payment Advisory Commission, a nonpartisan independent group created by Congress.
That includes an average of $2,660 per member this year — a record high — for benefits not available from traditional Medicare, such as dental, vision and hearing coverage, as well as transportation, groceries, bathroom grab bars and caregiver support.
Dental, vision and hearing care plus gym memberships were and remain standard fare but in 2019, the Centers for Medicare and Medicaid Services cleared the way for more benefits intended to prevent or reduce illness. A year later, Congress allowed plans to offer a new assortment of extra benefits that did not have to be primarily related to health care.
Then C.M.S. gave Advantage plans “broad discretion” to offer a new category, called Special Supplemental Benefits for the Chronically Ill, that have “a reasonable expectation of improving or maintaining health.” These can include reducing premiums and other out-of-pocket expenses.
Mr. Lipschutz and other patient advocates argue that the freebies are simply enticements meant to attract customers, but Martin’s Point chief marketing and sales officer, Steve Amendo, disagrees.
“The things that are included in our wellness wallet are meant to keep our members healthy, active and socialized,” he said.
These extra benefits must support people’s health, but the plans don’t have to tell the government if their members use the benefits and what they cost.
Lately, the C.M.S. administrator, Dr. Mehmet Oz, and other Trump administration officials have been targeting wasteful government spending in health programs. They’ve imposed a moratorium on accepting new hospice providers into Medicare and cracked down on bogus claims for procedures requiring expensive skin substitutes. And they’re taking a closer look at some of Advantage plans’ extra benefits.
“I don’t want you buying kayaks with that money — it’s the American taxpayer that subsidized this process and got it going,” he told a conference at the Aspen Institute in October. “So let’s be thoughtful about how the money is spent.”
Dr. Oz has also questioned payments for other items. Ensuring a water filter in the member’s house is important, he told a conference last fall of the Better Medicare Alliance, an industry group, “but it also might be you’re better off just making sure they can afford their medications so you buy down the premiums.”
For 2026 C.M.S. rejected requests from insurers that wanted to cover medical marijuana because like other cannabis-based products, it is illegal under federal law. Shopping club memberships like Costco are also off-limits because they can include streaming services like Netflix and travel discounts that don’t fit the criteria for “improving or maintaining health.”
More changes are coming in 2027 from C.M.S. as well as from some insurers, which are expected to scale back benefits to save money. Next year’s plan offerings will be unveiled in the fall.
Dr. Oz and other C.M.S. officials declined to be interviewed.
In Tucson, 68-year-old Lorinda Destrini appreciates the $130 a month her SCAN Medicare Advantage plan gives her on a debit card to buy over-the-counter pharmacy items and healthy foods.
“A lot of people nowadays have a hard time buying groceries,” Ms. Destrini said. She also uses her plan’s free rides to medical appointments.
Because Ms. Destrini has heart disease, she qualifies for the chronic illness benefits. These include home-delivered meals after a hospital stay, air-conditioners for asthma sufferers, pest control, rides to medical or social appointments, pet supplies, home modifications and help paying for utility bills, internet, rent and healthy groceries — just to name a few.
A confusing maze
The result is a maze of benefits for different groups of people with various eligibility restrictions and monetary value from different in-network providers. Purchasing methods also vary, with some plans limiting purchases of different items to an amount loaded onto a debit or “flex” card that can be used for online orders from a retail website, the plan’s exclusive website, or in-person shopping at certain stores.
The debit card amounts fluctuate widely even within Advantage plans from the same insurer. For example, this year UnitedHealthcare Advantage members with certain chronic diseases can get $407 per month in some Virginia counties, but only $35 in some New York counties. Members who don’t have a chronic illness and don’t qualify for Medicaid — the government health insurance program for low-income families — receive $25 every three months in some Oklahoma counties but $250 in some Tennessee counties.
“The most common purchases are exactly what you’d expect: fresh and frozen meats, milk, bananas, toothpaste, and vitamins, the everyday essentials that support health and well-being,” Bobby Hunter, chief operating officer of UnitedHealthcare Government Programs, said in a statement. A for-profit insurer, UnitedHealthcare is the nation’s largest Medicare Advantage provider, with nearly eight million members.
But the plethora of benefits with different strings attached can be frustrating, said Stephanie Fajuri, program director for the Center for Health Care Rights in Los Angeles. “I wouldn’t be surprised if some people signed up for plans thinking they were going to get certain supplemental benefits, only to later learn that they don’t qualify,” she said. The center is one of the 2,220 sites across the country that are part of the federally funded State Health Insurance Assistance Program, which offers free help navigating Medicare.
“It’s as clear as mud,” she said.
Medicare’s online plan finder at Medicare.gov helps beneficiaries narrow down their options. But it still omits some information.
“The only way to get the really nitty-gritty details about the added benefits is to contact the plans directly,” said Christina Reeg, director of Ohio’s Senior Health Insurance Information Program at the Ohio Department of Insurance. The number of plans varies by county, she added. Cuyahoga County, which includes Cleveland, has 73 this year.
In addition to the challenges of finding which plans offer which extra benefits, C.M.S. has acknowledged problems with using one debit card to pay for different kinds of benefits such as groceries and pharmacy items. Combining benefits “can create confusion as enrollees may not realize that using the card for one benefit means foregoing another,” Medicare officials wrote in a preamble to rules that will take effect Jan. 1.
Under the new regulations, plans will be required to post eligibility criteria for each benefit for chronically ill members. They must also provide instructions for using debit cards and ensure verification at the point of sale so that the debit cards pay only for covered items.
UnitedHealthcare’s “UCare” debit card is already programmed so it won’t pay for things it shouldn’t — like chocolate cake and other prohibited items, Mr. Hunter said.
To clear up some confusion about this year’s cannabis ban, CMS officials added an explanation for 2027: Advantage plans cannot cover cannabis products that are illegal under federal law, including medical marijuana and some forms of CBD, regardless of what state law allows, said Deborah Steinberg, senior health policy attorney at the Legal Action Center.
Where is the money going?
A Biden-era change that was supposed to take effect this year was delayed and then rescinded by the Trump administration. It would have required plans to notify beneficiaries every July about which extra supplemental benefits they haven’t used. Insurers had argued that one month was not enough time to mail an individualized lengthy document to millions of members without incurring excessive costs.
Information about which Advantage extra benefits are used is also essential to determine whether the federal tax dollars paid to Advantage plans are a good investment, said Gretchen Jacobson, vice president for Medicare at the Commonwealth Fund.
It’s no secret how much insurers receive to provide these benefits, but C.M.S. does not require plans to disclose how much money they spend and how much they keep. “There’s a lot of money going towards supplemental benefits, but we do not know if they’re the benefits that people truly want and the extent to which they’re actually being used,” Ms. Jacobson said.
This money would be enough to pay for a package of dental, vision, hearing and other extra benefits for all Medicare beneficiaries, according to a 2024 analysis Ms. Jacobson and her colleagues published in The New England Journal of Medicine.
That sounds like a good idea to Ms. Destrini, in Tucson. “I think it should be across the board for all seniors,” she said.
