Can You Withdraw Money From an OTC Card?

OTC cards are a common health benefit, helping individuals manage healthcare costs. Many wonder if these cards can be used to obtain cash. This article clarifies how these cards operate, outlining their intended uses, limitations, and effective management.

Understanding OTC Cards

OTC cards are prepaid benefit cards from health insurance plans, including Medicare Advantage and certain Medicaid managed care programs. They cover designated health-related expenses, distinguishing them from general-purpose payment cards. Funds are typically loaded monthly or quarterly, providing a consistent allowance for eligible items. This structured funding helps beneficiaries budget for routine health needs.

Permitted Purchases with an OTC Card

OTC cards are for specific health and wellness products at approved retailers. Eligible items often include:
Over-the-counter medications (e.g., pain relievers, cold and flu remedies, allergy medications)
First-aid supplies (e.g., bandages, antiseptic wipes)
Dental care products (e.g., toothpaste, toothbrushes)
Health monitoring devices (e.g., thermometers, blood pressure monitors)
Healthy foods or groceries (depending on the specific health plan)

The exact list of eligible items varies by health plan and card issuer; consult your plan’s specific catalog or online portal for detailed information. When making a purchase, the card operates similarly to a debit card: it is swiped at the point of sale, and the cost of eligible items is deducted from the available balance.

Cash Access and Prohibited Uses

OTC cards cannot be used for cash back, ATM withdrawals, or cash advances. They are benefit tools for specific health-related purchases, not financial instruments for cash. Medicare regulations prohibit health plans from providing cash to enrollees for covered over-the-counter items.

Other prohibited uses include general merchandise unrelated to health, such as alcohol, tobacco products, or lottery tickets. Gift cards are also not purchasable. Services not explicitly covered by the health plan, prescription medications, certain cosmetic items, or durable medical equipment are generally excluded. If a transaction includes both eligible and ineligible items, the card covers only the eligible portion, requiring another form of payment for the remainder.

Managing Your OTC Card

To manage your OTC card, check its balance via your health plan’s online portal, mobile app, or the customer service number on the card. These resources also help locate participating retailers.

Be aware of benefit expiration dates, as funds often do not roll over to the next month or quarter and are forfeited if unused. For questions regarding eligible items, card issues, or benefit details, contact your health plan’s member services.