Quick Facts: What You Need to Know About the 2021 Medicare MSA Plan
- The MSA Plan is an evolved form of Medicare advantage. It’s the only form of Medicare that comes with a $0 premium and a personal Medical Savings Account.
- Your Medical Savings Account (MSA) is an exclusive, tax-advantage account that can be used for out-of-pocket expenses. MSAs can also be used to pay for pre-deductible expenses.
- Unlike the HSA, MSAs are funded by your Medicare plan. That means that you’ll receive a tax-free cash deposit every year. As long as you use the funds on medical expenses, it remains tax-free.
- Switching to Medicare Advantage can significantly lower your monthly costs, but it’s a decision that you should discuss with your Personal Benefits Manager.
What is an MSA Plan / Medical Savings Account?
The Medicare MSA Plan is a form of Medicare Advantage. There are two parts to the MSA Plan:
- The first part is a high-deductible, $0 premium Medicare Advantage plan. This plan is required to cover all the costs that are covered by Original Medicare.
- The second part is a Medical Savings Account, or MSA. This is a plan-funded, member-controlled account. In other words, a portion of your Medicare benefit is deposited directly into an account that you control. As long as you use your MSA funds on qualified health expenses, you don’t have to pay taxes on it.
When Can I Enroll in an MSA Plan?
Like all Medicare Advantage plans, you can only enroll during certain times of year. The first is during your Initial Enrollment Period, which begins 3 months before your 65th birthday and continues for 3 months after that.
The second is during Medicare Open Enrollment, which is every year from October 15th to December 7th.
What are the Pros and Cons of the Medical Savings Account or MSA?
- All Medicare MSA Plans come with a $0 premium.
- Your MSA funds can be used for out-of-pocket medical expenses, giving you more control of how your Medicare dollars are being used.
- Unused MSA funds roll over from year to year and can earn interest, creating a valuable incentive to stay healthy.
- MSA Plans have no doctor’s network; You can use any provider that accepts Medicare.
- MSA Plans have a higher deductible, which could make E.R. visits and unexpected surgeries harder to pay for.
- Unlike HSAs, only Medicare can make deposits into your MSA.
Learn More About the Medicare MSA Plan
If you’re ready to switch to a better form of Medicare Advantage, you can do so during Medicare Open Enrollment. This is a period that begins on October 15th and extends through December 7th.
You can get ahead of the game by scheduling an appointment with your Personal Benefits Manager right away. Our no-cost Open Enrollment consultations begin on October 15th; Click here to get started or call us at 800-913-3416.
Here are some additional articles on Medicare MSA plans: MSA Plans: The Medicare Advantage Plan with Extra Advantage | How To Invest Your Medicare MSA Plan Money | Should You Switch to a Medicare MSA Plan This Fall?
Here are some additional pages related to this article: Medicare Medical Savings Account (MSA) Information | Medicare Advantage Enrollment Information
Misty Berryman is one of your Personal Benefits Managers at Medigap Advisors. She loves working for Medigap Advisors for many reasons, including being part of the solution to one of life’s most important healthcare challenges: choosing the right Medicare plan. Read more about Misty on her Bio page.