A Medicare Medical Savings Account is a type of Medicare Advantage Plan, however it is a little different type of plan. Below are some important details to know about these plans.
With an MSA plan you can go to any doctor, hospital, or provider that accepts Medicare. No referrals are needed with this plan. Some MSA plans may have preferred doctors and hospitals you can go to for a lower cost.
You are responsible for paying Medicare bills until you have met the plan’s annual deductible, which varies from one MSA plan to the next. All medical bills related to Medicare Part A Hospitalization and Part B Medical will apply towards reaching the deductible.
An MSA plan does not include prescription coverage, so you may need to purchase a Part D Prescription Drug Plan to help with those costs.
How about the account, what is it and how does it work?
When you join an MSA plan you will create a savings account which the plan will deposit money into. The amount deposited is determined by the insurance company and can change from year to year; however, it must always be disclosed to those on the MSA plan.
The funds deposited into your account can be used tax free for Qualified Medical Expenses, including reaching the MSA plan’s deductible and/or paying for prescription copays. Additionally, you can also use the funds for other healthcare costs not covered by Medicare including dental, vision, and hearing.
Money left in the account at the end of the year stays there and can be used for Qualified Medical Expenses in future years. If you choose to not keep the MSA plan after the calendar year, the funds are still yours and stay in the account.
Other details to know:
The funds in the account cannot be used to pay for Part D Prescription Drug Plan premiums
You cannot deposit your own money into the account.
See listing below for examples of Qualified Medical Expenses and what the funds can be used for.
Qualified Medical Expenses: Medicare Part A & Part B Expenses
- Count toward health plan deductible
- Tax-free
- Examples include, but not limited to, hospitalization stays, physician services, x-rays, and lab tests.
Qualified Medical Expenses: Non-Medicare Expenses
- Do not count toward health plan deductible
- Tax-free
- Examples include, but not limited to, prescription drugs, dental cleanings, hearing aids, and eye glasses.
Non-Qualified Expenses
- Do not count toward health plan deductible
- Taxed as income and penalized by IRS
- Examples include, but not limited to, rent, food, electronics.
If you would like to learn more about a Medical Savings Account plan and if one could be suitable for you please contact me.
John Bush has been an independent insurance broker helping those on Medicare learn of their rights and options since 2010. He has helped many people find the right plan that is best for them. John is passionate about helping people in a manner that is easy to understand, resourceful, and non-pushy. John helps people get the best coverage for their premium dollar without sacrificing customer service.