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What Is a Medicare Flex Card?

Pre-loaded health cards offer a way to pay for services upfront but not out of pocket. However, they’re not offered by Medicare directly. Here’s what you need to know about flex cards and their function. 

Senior woman using tablet computer and credit card

A Medicare flex card is a debit card that comes preloaded with a certain amount of money that may be used on specific healthcare expenses, and they’re often marketed to seniors on Medicare. However, despite the name, Medicare flex cards are not issued by Medicare itself, but are promotional efforts by private health insurance companies to encourage customers to sign up for their Medicare Advantage plans.

While these cards come with the advantage of directly available funds that can be used at your discretion for healthcare expenses, getting a flex card may be more complicated than advertisements make it appear — and may come with additional costs and complications worth considering. Here’s a look at what flex cards are (and are not), how they work, how to get one, and how to protect yourself from potential flex card scams.

Is a Medicare Flex Card Free Money?

A flex card is not free money. While advertising for these cards may make it seem like you’re being given free money to spend on healthcare expenses, this is not exactly true. Although flex cards do come pre-loaded with a set dollar amount you can use, the benefits of this money may be offset by additional out-of-pocket costs such as higher deductibles, higher coinsurance rates, and higher monthly premiums.

This is because flex cards are offered as part of private insurers’ Medicare Advantage plans, not as stand-alone items. Getting a card means signing up for a new insurance plan, which comes with its own set of costs, benefits, and coverage limits. For example, you might see an offer for a flex card with a $1,000 balance — but if the insurance plan tied to the card comes with a $25 per month increase over your current Medicare Advantage premium and doubles your deductible from $500 to $1,000, you could end up paying more each year even with your flex card.

It’s also worth noting that there’s no set amount for flex cards. While some private insurance companies may offer cards that carry balances of several thousand dollars each year, many may fall in the lower hundred-dollar range.

Are Flex Cards Available with Medicare Supplement Plans?

Because Medicare supplement plans — also called Medigap — are designed to help offset out-of-pocket costs for services that are not covered by Original Medicare, flex cards are not available with these plans.

In addition, policyholders cannot carry both Medigap and Medicare Advantage insurance. Since Medicare Advantage providers are the issuers of flex cards, carrying a Medigap plan means there is no way to access a flex card.

How Do Flex Cards Work?

Flex cards for seniors work like pre-loaded debit cards. Money on the card can be used to pay for specific health services, such as dental or vision care, prescriptions, or even healthy groceries. However, what’s covered may vary from provider to provider. The money on these cards is offered in addition to existing insurance coverage and allows cardholders to use them as they see fit. For example, if you’re in the market for new glasses, but your Medicare Advantage plan does not provide vision coverage, you may be able to use your flex card to cover some or all of the cost.

Flex cards share some similarities with flexible spending accounts (FSAs), which can be used to pay for deductibles, copayments, and prescriptions. Unlike flex cards, however, FSAs are linked to health insurance plans that are offered through employment. Employees can contribute up to $2,850 per year to their FSA, and employers may also contribute if they choose. FSAs also require you to pay for covered health services out-of-pocket and then submit a claim for reimbursement, while flex cards let you access money for costs directly.

Not all private insurers offer flex cards, and not all flex card programs are created equal. Some Medicare Advantage plans with flex cards make all funds available upfront at the beginning of the year, while others opt for installment models that see additional money added every month or every quarter. For example, one plan might offer a flex card with $2,000 pre-loaded on the card at the beginning of each year that is then topped up to $2,000 every year thereafter. Another might offer $2,000 but spread that amount out over an entire year by adding $500 on the card in January, $500 in April, $500 in July, and $500 in October.

If you have regular, recurring medical expenses, this quarterly flex card model may work for you, but if your health needs are more variable, upfront funds may be a better choice.

What Do Flex Cards Cover?

Common health services covered by flex cards include:

  • In-network primary care visits
  • Specialist visits
  • Copayment costs
  • Medical equipment
  • Diagnostic devices
  • Over-the-counter medications
  • Certain prescriptions
  • Healthy groceries 

Keep in mind that because flex cards for seniors on Medicare are provided by private insurers, these companies can decide what their cards cover and what they don’t.

How to Get a Flex Card

Getting a senior flex card starts with finding a private health insurance provider that offers these cards as part of their Medicare Advantage plans. Despite a recent uptick in online advertising, however, these cards remain relatively rare. For example, they may only be offered by certain private insurance companies in certain states, and even then, only for customers on select plans or who meet specific criteria.

These criteria vary based on the provider. Some may offer plans that include flex cards to customers who have been with the company for a certain length of time or may make these cards part of a tiered pricing system that requires customers to purchase plans with higher deductibles or copayments.

Applying for a Flex Card

To apply for flex card benefits, contact your Medicare Advantage provider. There is no enrollment period since not all insurers offer these cards, and those that do may have different rules about the amount of money these cards carry along with the services they cover.

If your provider does offer these cards, ask for details about the total amount available, what services are covered, and if any unused balances roll over to the next year. 

Medicare Flex Cards vs. Flexible Spending Accounts (FSAs)

Though superficially similar to flexible spending accounts (FSAs), Medicare flex cards differ in where they are offered and how they are funded. Medicare flex cards carry a prepaid balance that cardholders can use to pay for specific healthcare services. They are offered by some private insurance companies through Medicare Advantage plans. Keep in mind that these cards are not associated with government-run programs such as Original Medicare, so any ads indicating that it’s possible to obtain a government flex card for seniors are false.

Flexible spending accounts (FSAs), meanwhile, are offered through employer-sponsored healthcare. They are non-taxed accounts that are used to pay for certain medical expenses not covered by employer plans. You can make contributions to your FSA through payroll deductions for as long as you are employed.

While both FSAs and flex cards may be used to cover the cost of health services, FSAs have set contribution limits. In 2022, this amount is $3,050 per year. Money on Medicare flex cards, meanwhile, is disbursed according to a schedule set by Medicare Advantage providers. For example, money may be added in a lump sum each year or in smaller amounts each quarter. 

How to Use Your Flex Card

Using a flex card is like using a debit card. If the healthcare service being provided is covered by the flex card, cardholders would swipe the card at point-of-sale (POS) terminals to pay for services, and the amount is deducted from the account. Once the money in the flex card account is spent, the card cannot be used again until it is reloaded by the insurance provider based on their guidelines. 

Red Flags for Flex Card Scams

Health insurance fraud results in losses of up to $300 billion each year. In some instances, this fraud is carried out by individuals who provide misleading or false information to insurance providers as a means to access services at reduced costs or by using someone else’s identity. Fraud may also be carried out by companies who offer services that they never deliver or who obtain customers’ personal data and then use it to commit identity theft.

But in some cases, fraud may be more subtle. For example, flex card providers may make claims about their cards that are not outright lies, but are misleading. Consider a company offering $2,000 flex cards. While the claim may be objectively true, consider how these funds are dispersed. Is the full amount provided upfront or over a period of time? What conditions are part of the Medicare Advantage plan that goes along with the card?

To help reduce the risk of flex card-based fraud, it’s worth watching out for common red flags.

They claim to be offered by the government

While flex cards may be offered as part of Medicare Advantage plans, there is no government flex card for seniors. This means they are not part of government-managed Medicare plans. Advertisements that claim or indicate that flex cards are being offered by government agencies are, therefore, patently false.

This is a red flag because ads like this make it seem as though the government has some role in overseeing or managing these cards. For example, you might see an ad offering a “Medicare flex card” — while these flex cards are part of Medicare Advantage plans, not being clear about this upfront is a red flag.

They claim to offer “free money”

Flex card offers that claim to give you free money are also a red flag because, put simply, they aren’t giving you free money. For health insurance companies to stay profitable, they need to make money on the products and services they sell. As a result, any money loaded onto a flex card is offset by payments somewhere else. This might include higher deductible payments, larger copayment percentages, or an increase in your average healthcare premium.

Claims of free money are meant to distract from other costs, and are a red flag that providers aren’t being entirely honest. 

They ask for personal information right away

When you enroll in a Medicare Advantage plan, your provider will ask for personal and medical information to determine the overall cost of your plan and the best mix of coverages and limits that work for you. Since insurance operates on the risk-reduction model, this information is relevant to help your provider create an accurate insurance quote.

However, if your prospective flex card plan is asking for personal information to provide you with a high-level overview of the plan, this is a red flag. In this case, your information could be used to commit insurance fraud or as part of an identity theft scam. Here, the general rule is to supply as little personal information as possible until you’re ready to purchase a plan and you’re confident that the provider is legitimate.

How to Protect Yourself Against Fraud

Along with watching out for red flags, there are also other steps you can take to protect yourself against fraud, such as taking your time when considering a new provider and ensuring that you get clear and accurate answers to any questions you may have about a flex card and how it works. 

Verify that your company or agent is legitimate

First, take the time to verify that the company or agent you’re dealing with is legitimate. Start with some basic research by searching for the company or agent’s name online and seeing what comes up. If you find a host of reviews indicating that customers didn’t get what they paid for or that the plans aren’t as advertised, this is an indication that something isn’t right.

It’s also worrisome if there’s no information to be found at all. A lack of reviews, websites, or social media pages could indicate that a company or agent is new to the industry, or it could suggest that they’re not being honest about their business practices. Tools such as state insurance databases can help you look up agent or company credentials. For example, the California Department of Insurance offers their Check a License tool that provides both license status and any records of disciplinary action, and many states’ departments of insurance have similar resources.

Demand clear answers

Flex card advertisements are designed to generate interest with bold statements, but can be short on details. As a result, it’s worth asking your prospective provider-specific questions and demanding clear answers in return.

For example, if the company says you get a $2,000 flex card, ask how much of the money you get upfront. Does any of this value roll over to the next year? What are the costs of premiums and deductibles on the flex card plan compared to those without a flex card option?

Read the fine print

The devil is in the details. This is especially true for insurance contracts, which may contain provisions or stipulations that can affect both your coverage and how much you pay. When it comes to flex cards, it’s worth reading the fine print to make sure you’re eligible for a card before agreeing to the plan. Some providers add in clauses that specify certain thresholds for eligibility, such as plan type or medical history, meaning you could sign up for a plan only to discover you won’t be getting a flex card. 

What to Do If You’re a Victim of Medicare Fraud

Even if you do everything right, you could still be a victim of Medicare fraud. If you suspect that you’ve been victimized, the first step is to reduce the amount of damage the scammer can do to your identity or credit history. If you’ve provided any credit card information, notify your card provider and cancel the cards to reduce the risk of any fraudulent spending. Next, contact your bank to inform them that you may have been a victim of Medicare fraud and identity theft and ask them to watch for any suspicious activity. You may also want to contact your primary care doctor and local pharmacist to head off any attempts by scammers to use your information.

If you suspect you are the victim of a scam, don’t let the scammer know you are suspicious since this may prompt them to do something rash with your information, such as running up credit card debt or trying to sell your personal information online. Instead, stop all contact with the scammer and report the scam to the authorities.

How to Report a Suspected Medicare Scam

If you believe that you have been the victim of a Medicare scam or you see advertisements for flex cards or other plans that seem suspicious, you can report these scams to the government. In the case of Original Medicare fraud, call 1-800-MEDICARE or report online at the U.S. Department of Health and Human Services – Office of the Inspector General. In the case of Medicare Advantage Plan or Medicare drug plan fraud, call 1-800-MEDICARE or 1-877-7SAFERX.