Responding to an October 2024 letter from Representative Lloyd Doggett (D-TX) and other House members for clarification on appropriate treatment of Medicare Advantage (MA) flex cards in calculating eligibility for various government benefits, the Center for Medicare and Medicaid Services (CMS) on January 8, 2025 acknowledged the request: “We appreciate your view that debit cards provided to MA enrollees by MA plans to administer certain benefits should not be considered countable assets or income for the purposes of calculating eligibility for federal assistance and benefits allowance,” Administrator Chiquita Brookes-LaSure said on behalf of the Biden Administration.

In her response to Rep. Doggett and more than 30 of his house colleagues’ October 11 plea, which LeadingAge supported as “timely” and “urgent”, she says that “while CMS does not have statutory or regulatory authority to regulate how other federal
agencies categorize supplemental benefits, we have made it clear that debit cards are not benefits themselves, but rather a mechanism for MA plans to make payments for plan covered items and services. In other words, they are simply a means to access a covered benefit.”

CMS’ January 8 letter suggests, therefore, that the flex benefit cards should not factor into eligibility determinations for assistance or benefits but is not explicit in saying that. It also cites the fact that these benefits are tied to “improving or maintaining health,” are not a cash benefit and require CMS approval. These are similar arguments LeadingAge has used to suggest the flex card benefits’ exclusion.

CMS reiterated its commitment to assist other agencies on how to account for the benefits. By stressing that these are covered services or benefits, CMS’s statement leaves open a door for other federal agencies that count non-monetary assistance in income calculations. For example, Supplemental Security Income (SSI) defines “income” to include “in kind contributions,” and could potentially continue to do so within the CMS statement.

Similarly, the Department of Housing and Urban Development (HUD) maintains that MA flex card benefits that are used toward housing costs, which include rent and utilities, count under HUD’s definition of “income” when determining assistance, while non-housing cost-related MA benefits do not. HUD staff, speaking at  LeadingAge 2024 Annual Meeting in Nashville late last year told attendees that clarification, in the form of Frequently Asked Questions (FAQs), on supplemental benefits are forthcoming, following LeadingAge’s September 2024 request.

To date, the U.S. Department of Agriculture is the only agency that has explicitly instructed state agencies to exclude MA supplemental benefits from the income calculation for the purposes of determining Supplemental Nutrition Assistance Program benefits. A December 5, 2024, memo instructs that ““state agencies must exclude all Medicare Advantage (MA) supplemental benefits when determining income for SNAP purposes.”