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.

How a Medicare Medical Savings Account Works

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. 

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.

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What MSA Plans Cover

A Medicare Medical Savings Account is a kind of Medicare Advantage plan. It offers extra benefits that Original Medicare does not, which may include:

  • Fitness memberships
  • Over-the-counter drugs
  • Adult day-care services
  • Transportation to doctor’s offices
  • Nutrition and wellness programs
  • And more

Remember that your eligibility for benefits will vary depending on your area and plan providers. Also, any out-of-pocket expenses associated with these extra benefits count as qualified medical costs, but they do not count toward your deductible.

When to Enroll in a Medicare Medical Savings Account

If you are eligible for Medicare, then you are eligible for a Medicare Advantage plan. But there are certain times in which you can enroll:

Initial Coverage Election Period (ICEP)

ICEP is a seven-month period that is your first opportunity to choose a Medicare health plan. It starts three months before the month you turn 65 and ends three months after the month you turn 65. If you are under 65 and you receive Social Security disability, you are eligible for Medicare in the 25th month after you begin receiving your Social Security benefits.  

Annual Election Period (AEP)

Also known as open enrollment, the AEP is October 15 through December 7 each year. Once January hits, coverage for your selected Medicare Advantage plan will begin. During this time, you may also add, change, or drop current coverage.   

Medicare Advantage Open Enrollment Period

During this period, you can switch from one Medicare Advantage plan to another. Or, you can end it to return to Original Medicare. 

Special Election Period

Many factors can stimulate a special election period and they are unique to an individual. It’s best to speak with a licensed Medicare insurance agent to find out whether you qualify for a special election period. However, there are a few common situations, like if you move outside your Advantage plan’s service area, move into a nursing home, or qualify for additional aid, you could be eligible for this special election period. You can institute changes to your Medicare Advantage plan during this period or go back to Original Medicare.

If you have questions about MSA plans or you would like a quote, we want to help. Call 800-515-4031 today.