WASHINGTON — The Consumer Healthcare Products Association (CHPA), the national trade association representing leading manufacturers in the personal healthcare products industry, released the results of research showing that over-the-counter (O-T-C) medicine supplemental benefits programs offered by Medicare Advantage (MA) plans do not only help enrollees, they also benefit health plans.

The new CHPA report, “Using the Medicare Advantage Over-the-Counter (OTC) Medicines Program as a Consumer Engagement Tool,” is the result of research conducted by Pareto Intelligence and HealthScape Advisors showing that enrollees who use OTC program benefits have greater healthcare needs, and health plans see lower medical costs, reduced utilization, and improved outcomes for many OTC benefits users. The full report is available for free at www.CHPA.org/medicareadvantage.

The report highlights that 80 percent of MA plans offer OTC allowances as one of their top five supplemental benefits, along with dental, hearing, fitness, and vision. Now 18 million consumers have access to MA plans with OTC benefits. The study also notes that, on average, OTC benefit allowances are $400 per enrollee per year totaling more than $7 billion in allowances for OTC medicines and other covered products.

The report found that using these benefits is an attractive option for current and prospective enrollees, and increasingly attractive to the health plans that offer them. Overall healthcare spending for OTC benefit users is equivalent to non-users, but the Centers for Medicare & Medicaid Service (CMS) Risk Score is lower for OTC benefit users compared to non-users. Additionally, certain populations that use OTC benefits show lower medical costs, reduced hospital utilization, and better health outcomes. For example, medical costs among OTC benefit users with obesity were 62 percent lower than non-benefit users, and 29 percent lower for those with substance abuse disorders. Additionally, OTC benefit users who purchased eye and ear care products had, on average, 13 percent lower hospital admissions and 8 percent lower medical costs than non-users. Enrollees with a current or recent stroke diagnosis had 10 percent fewer admissions and 23 percent lower prescription drug costs on average.

However, typically only 30 percent of OTC allowances are actually used by eligible enrollees each year, leaving $5 billion unused in aggregate. “There’s a lot of benefit left on the table,” says David Spangler, senior vice president for legal, government affairs and policy at CHPA. “When we see so many advantages in terms of real cost to health plans and systems, like reduced per member per month medical and utilization costs, health plans should do all they can to get enrollees to use this benefit.”

Competitive dynamics and growth in the MA market are driving health plans to seek new ways to enhance plan offerings, improve enrollee experience, and evolve their care management strategies. As the CHPA report illustrates, health plans are looking more and more to supplemental benefits like OTC programs which benefit consumers and health plans alike. According to Zain Jafri, vice president for innovation and analytics at Pareto Intelligence and primary investigator for the CHPA study, “There is a real opportunity for health plans, consumer health organizations, manufacturers, and policymakers to collaborate to take better advantage of OTC benefits programs.” View the full report and join the conversation at a virtual webinar on November 10. Visit www.chpa.org/medicareadvantage to get the full report and register for a free webinar to learn more about the study findings and implications.