Medicare Advantage plans, which provide health insurance to more than 35 million Americans as an alternative to traditional Medicare, are under increased scrutiny over their extensive use of extra, non-traditional benefits. These plans, offered by commercial insurers, receive fixed government payments intended to cover standard Medicare services as well as additional perks aimed at improving enrollees’ health and well-being.

Since 2019, insurers have been allowed to offer a wider range of supplemental benefits not covered by traditional Medicare, including dental, vision, hearing coverage, gym memberships, transportation, and health-related household items. Some plans also provide debit cards preloaded with funds that members can use for items such as over-the-counter medications, health foods, fitness equipment, and even outdoor recreation gear like kayaks or canoes.

John Holland, a 78-year-old Medicare Advantage enrollee from Gorham, Maine, receives quarterly $50 credit on a debit card to buy essentials like toothpaste and sunscreen, plus an annual $300 “wellness wallet” for classes, treatments, or exercise equipment. He values his plan’s gym membership support, which he sees as encouragement to stay healthy and active.

The Centers for Medicare and Medicaid Services (CMS) allows these so-called “Special Supplemental Benefits for the Chronically Ill” to address broader social needs that affect health, such as home modifications, transportation to medical appointments, pest control, and meal delivery. However, critics argue some of these benefits exceed what is appropriate and serve primarily as marketing tools to attract and retain members.

David Lipschutz of the Center for Medicare Advocacy noted that CMS’s early guidelines were broad and now require judgment calls to distinguish legitimate health-related offerings from incentives that could be viewed as wasteful spending. CMS recently tightened rules for 2026, banning coverage of medical marijuana due to federal law prohibitions and disallowing shopping club memberships and “non-healthy” food benefits, citing concerns about taxpayer-funded subsidies for non-medical items.

Insurers defend the benefits as meaningful support to help beneficiaries maintain health and prevent costly hospitalizations. Steve Amendo, chief marketing officer at Martin’s Point Health Care, emphasized that their wellness wallet is designed to keep members active and socially engaged.

Despite the expanded benefits, experts and beneficiaries report confusion over which plans offer which perks, eligibility requirements, and spending limits. For example, UnitedHealthcare Advantage enrollees with chronic diseases receive varying monthly debit card amounts depending on their county, ranging from $35 to $407. Plans often use different purchasing platforms and restrictions, and CMS will require clearer disclosures and card usage instructions starting in 2025.

Lorinda Destrini, 68, of Tucson, Arizona, who has heart disease, appreciates the extra funds provided by her SCAN Medicare Advantage plan to buy healthy foods and over-the-counter products, as well as free rides to medical appointments. She supports expanding these benefits to all seniors.

A persistent challenge is the lack of transparency regarding how much of the roughly $615 billion CMS will spend on Medicare Advantage in 2024—about $76 billion more than traditional Medicare—actually goes toward supplemental benefits versus insurer profits. CMS does not currently require plans to report detailed spending on extras or member utilization rates, limiting the ability to assess the value of these programs to taxpayers and beneficiaries.

Efforts to improve accountability, such as requiring annual reports to members on unused benefits, were delayed and ultimately rescinded under the previous administration. Experts emphasize that without clear data on use and outcomes, it remains unclear whether supplemental benefits are meeting the needs and preferences of enrollees or primarily functioning as marketing incentives.

As CMS reviews policies and insurers prepare 2027 plan offerings, reductions in some supplemental benefits are expected as part of cost-saving measures. The ongoing debate underscores the challenge of balancing innovative approaches to comprehensive care with fiscal responsibility and program integrity in Medicare Advantage.