Medicare Medical Savings Account (MSA Plans)
An MSA plan is an exceptional type of Medicare Advantage plan. These plans are a combination of a medical savings account (MSA) and a high-deductible health plan (HDHP). MSA is very similar to Health Savings Account (HSA) plans that can be purchased outside of Medicare.
Here is a closer look at Medicare Medical Savings Account.
How Medicare Medical Savings Account Plans Work
The concept of the Medicare Medical Savings Account plan in some ways is similar to HSAs and HDHPs that are available to people not covered by Medicare. However, HSAs contributions are made by the account owner, employer, or anyone else who contributes to your account. In contrast, your Medicare Advantage plan provider is responsible for depositing money into your MSA. The MSA plan makes use of the funds it gets from Medicare, and members cannot contribute to their own account.
You can then use the fund in your Medicare Medical Savings Account whenever you have qualified medical expenses. Withdrawals from the MSA are not taxed if you use them for qualified medical expenses. But if you withdraw the money for anything other than the approved medical expenses, the amount of money withdrawn would be subject to both an income tax and a 50% penalty. At the end of the year, the remaining funds in your account will roll over to the following year.
Cost of Medicare Medical Savings Account
The major cost of enrolling in MSA is the high deductible of the plan before Medicare covers the rest of your expenses. The cost will depend on your individual plan. However, for the most part, the funds deposited into the savings account will not exceed the amount of the deductible and will most likely be less than the deductible. With this in mind, if you can pay for your medical expenses out-of-pocket without using the funds of the savings account, then as mentioned above, the funds will roll over into the next year, along with the new deposit, giving you more money in the account.
Also, if you have MSA, you’ll still need to pay your Part B monthly premium, as well as the Part D premium if you need prescription drug coverage.
Is a Medicare Medical Savings Account Right for You?
Medicare Medical Savings Account plan provides flexibility, which allows you to have more control over your healthcare. Even if they do have provider networks, all MSA plans must provide coverage for out-of-network care, but do note that you may pay more in out-of-pocket costs by receiving care outside the network.
These plans also provide the same coverage as all other Medicare Advantage plans, including dental, vision, hearing, and long-term care. However, as mentioned previously, you will have to purchase a Medicare Prescription Drug plan if you want coverage for your prescriptions.
Let Us Help You Find the Right Plan
At Simple Retirement Benefits, we believe in providing personalized solutions to Medicare beneficiaries. Contact us today to learn more about MSA plans and discuss your other plan options with one of our experienced Medicare insurance experts.
