The Medagate Corporation, a provider of healthcare benefit services, has announced a partnership with pre-paid card and transaction processing company InComm to launch the OTCNetwork, a national over-the-counter benefits disbursement and redemption network for Medicare Advantage plan members.
Medicare Advantage members whose health plans are part of the network will receive pre-paid debit cards aimed at making it easier for seniors to take advantage of this underused insurance benefit.
According to Devin Wade, president and founder of Medagate, the reloadable pre-paid card program is a combination of two existing models for debit cards.
"On the open loop side you have Visa and Mastercard that are accepted everywhere but you can not do restrictions," he said. "Then there are closed-loop programs, where you have a Walgreens card but you can only use it at Walgreens. We saw an opportunity in the middle where we could have wide acceptance but also restrict what can be purchased to OTC items."
For the roll-out, the OTCNetwork announced the participation of two New York-based health plans, Health Plus Elite and Access Medicare, as well as pharmacy partners Duane Reade and RiteAide. Other retailers slated to hop on board include CVS, Family Dollar, HEB Winn Dixie, SaveMart, and Bashas.
The goal of OTCNetwork is to have its cards accepted at as many retail locations nationwide as possible that sell over-the-counter medications, allowing Medicare plan members the flexibility to choose a pharmacy or retailer. InComm, which focuses on stored value gift cards and prepaid cards using its point-of-sale technology, has a presence in more than 220,000 retail locations and processes transactions in excess of $15 billion annually. It has leveraged its retail presence for the OTCNetwork, which is already available at more than 20,000 locations nationwide.
"Our retailers recognize the future of healthcare will include a heavy dose of self care in an effort to improve general health and reduce costs," said Mark Leonard, InComm's executive vice president. "For the first time, Medicare Advantage plan members will be able to use their benefits for self-care via OTC items when they need them."
Being able to use a prepaid card that restricts spending to eligible over-the-counter items should greatly improve the use of this benefit, proponents say.
"This reduces burdensome extra work that members would need in order to take advantage of this benefit," said Ramon Rodriguez, CEO of Access Medicare, which serves members in the New York boroughs of the Bronx, Queens and Manhattan. "Normally our members would need to use either a catalog or get a prescription from the doctor to get their over-the-counter medications covered. This reduces the extra work and makes it much easier to get the medications they need."
According to Wade, of the $5.5 billion dollars of OTC benefits available annually in Medicare Advantage plans, only 4 percent of that benefit amount is used each year.
For Rodriguez, the benefit goes beyond dollars and cents.
"This encourages self-care among members," he said. "Anything that permits a member to help coordinated their own care is a positive."