Medicare Medical Savings Account Plans

Medicare Medical Savings Account (MSA) plans are a type of Medicare Advantage plan that Medicare-approved insurance companies sell. MSA plans must provide you with the same coverage as Original Medicare, but they offer extra benefits, too.

Medicare Medical Savings Account Plans

MSA plans feature a high deductible health plan (HDHP) and a bank account to help cover your medical expenses. HDHPs include a large deductible that you have to pay in full in order to receive coverage. After you pay off this deductible, the HDHP covers 100% of your costs for the rest of the year.  

As previously mentioned, MSA plans also include a bank account. In this bank account, the plan provider deposits funds every year for your medical costs. Then, you can use these funds to pay the deductible. Just know that the amount the plan provider contributes is less than the deductible.

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How Does Medicare MSA Plan Work?

When it comes to MSA plans, here is what else you should know:

  • To be in a MSA plan, you must stay enrolled in Original Medicare
  • You are prohibited from personally depositing more money into your MSA bank account. Once you have spent all the money in the account, you pay out-of-pocket until you reach the deductible.
  • Any money you have left at the end of the year will remain in the account for the next year.
  • As long as the contributed funds are used for qualified medical costs, they are not taxed. 
  • MSA plans cannot include Part D prescription drug coverage. If you want prescription drug coverage, you must join a standalone Part D plan.  
  • If you decide to join a Part D plan, out-of-pocket expenses associated with the prescription drug plan do not go toward your MSA plan’s deductible.
  • MSA plans usually have provider networks which are required to cover out-of-network care. However, you might pay a higher cost.

Who Can’t Join MSA Plan?

There are certain rules of whom is eligible to get MSA plan. Therefore benefciares aren’t eligible if they fall in some of this categories:

  • You have health coverage that would cover the Medicare MSA Plan deductible, including benefits under an employer or union group health plan.
  • You get benefits from the Department of Defense (TRICARE) or the Department of Veterans Affairs
  • You’re a retired Federal government employee and part of the Federal Employee Health Benefits Program 
  • You’re eligible for Medicaid
  • You have End-Stage Renal Disease 
  • You’re currently getting hospice care
  • You live outside the United States more than 183 in a year

MSA Plans Costs

MSA plans don’t  usually have a month premium besides to the Part B premium. You can have a higher out-of-pocket costs befor you meet the deductible. Your yearly deductible is pro-rated  according to the months that are left in the following year.

For, example if your deductible is 7000$ and the coverage starts October the 1st your monthly payment will be 3500$.  You will not be taxed if you used money that is left on your account for your qualified medical expenses.

If you are interested in purchasing an MSA plan you can do it here in Turning 65 Solutions. Call us today for more information.