Medicare Allowance Changes in 2025

By: Crystal A Manning and Dvonya Sedlacko-Stephens

Like other aspects of Medicare and Medicare Advantage plans, Medicare allowances have the potential to change year-to-year. Despite this, carriers tend to keep allowances relatively consistent – especially if they know beneficiaries are happy with their offerings.

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 (the Act).

Medicare Advantage plans, also called Medicare Part C, offer a variety of allowances, from food and groceries to transportation and wellness programs. Medicare allowances must be used for health and wellness purposes.

That's where you really must do your homework in terms of shopping, comparing individual Medicare Advantage plans. 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.

Most 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. Many times, the “extras” are more important.

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 paid for prescription drugs until their total yearly out-of-pocket costs reached $8,000. 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.

Examples of Medicare Allowances

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. The grocery allowance, also known as the health foods benefit, is offered under the broader category of “special supplemental benefits for chronically ill” enrollees of certain Medicare Advantage plans. It’s designed to help people manage chronic conditions through healthy nutrition. While original Medicare doesn’t offer a grocery allowance, some private Medicare Advantage plans do, including some special needs plans (SNPs).

Grocery allowances help people with chronic health conditions pay for healthy food. Some Medicare Advantage plans also offer meal delivery for plan members after a hospital or skilled nursing facility stay without limiting that benefit to people with chronic conditions.

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.

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.

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:

• Non-emergency transportation

• Meals

• Home aides/caregiver support

• Bathroom safety devices

• Dental care

• Eyewear

• Hearing aids

• Fitness

• Telehealth

• Wellness and disease management

  
  

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.

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.

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. However, it may be easier to ask for help in this process by leaning on the advice of a Medicare insurance broker.

Contact Licensed Medicare Advisor, Crystal A Manning at 412-716-4942

crystalmanning33@gmail.com or Dvonya J Sedlacko-Stephens at 412-657-3889 djsedlacko@gmail.com