The Medicare MSA Plan is a Two-Part Savings Strategy That Puts YOU in Control
You have probably been hearing quite a bit about the new Medicare MSA Plan. That’s not surprising, considering how many people are making the switch to this innovative new form of Medicare Advantage.
But like any other form of healthcare, it can be difficult to keep track of all the mumbo jumbo. What else would you expect from people in the healthcare industry? Over-complication is the name of their game. Just consider this: The scientific name they came up with for “ice cream headache” is literally sphenopalatine ganglioneuralgia.
At MediGap Advisors, our goal is to simplify the process of paying for health care, sometimes one question at a time. With that in mind, we’re going to spend some time on a question we’re getting a lot these days:
What’s the difference between an MSA and an MSA Plan?
MSA vs. MSA Plan: What’s the difference?
“MSA” stands for Medical Savings Account. “MSA Plan” refers to the Medicare MSA Plan, a relatively new form of Medicare advantage that comes with an MSA.
The reason that these terms cause confusion is because they are often used interchangeably. But while MSA and MSA Plan are two different things, they are also totally symbiotic. You can’t open an MSA without enrolling in an MSA Plan … and you wouldn’t enroll in an MSA Plan unless you were interested in the MSA.
Make sense so far? Let’s take it a step further, and break down both key parts:
The Medicare MSA Plan: A self-directed Medicare plan for the savvy retirement planner
If you’re already enrolled in Medicare Advantage, then you probably know how it makes Medicare much easier to pay for. Instead of enrolling in multiple plans to meet your medical needs, you get everything you need from one place. It’s kind of like the one-stop-shop of Medicare.
The Medicare MSA plan is a similar idea, but with one important and valuable twist. Instead of your monthly premium going towards blanket coverage that you might not use, a portion of it gets returned to you, in the form of a regular deposit to your new Medical Savings Account.
Then, you can use those funds to pay for the coverage and treatment that you actually need. Meanwhile, your base plan is still giving you all the same coverage as Original Medicare (Parts A & B).
The Medical Savings Account: Exclusive tax-advantaged savings
MSAs are tax-advantaged accounts that you can use to pay for future medical expenses. Your MSA Plan makes a regular deposit to the account, at which point it becomes totally yours. From there, it rolls over from year to year, and will also be earning interest in the meantime.
Anytime you have a medical expense that isn’t covered by Part A or Part B, you can use your HSA funds to cover it. That includes any bills that you incur before your Medicare deductible is met.
You can also use your MSA to pay for:
- A Part D prescription drug plan
- Your Part B deductible and coinsurance
- Dental work
- Prescription glasses, contacts, and LASIK
- Hearing aids
The list of what your MSA can pay for goes on and on. But the point is, every MSA dollar that you use to pay for medical stuff is a dollar that is not coming out of your retirement savings.
The other massive advantage is that if you need less medical care, you won’t use your MSA as much, and your funds will continue to grow. You can even use the money you’ve saved in your MSA to pay for the costs of long-term care.
Learn more about Medical Savings Accounts (MSAs) and the Medicare MSA Plan
Enrolling in the Medicare MSA Plan is not for everybody. But individuals who are interested in making their own decisions about their health should check it out. It’s the only form of Medicare Advantage that actually rewards you for not using your coverage, while you still get to stay protected with everything offered by Parts A and B.
The industry is calling it consumer-directed healthcare. Frankly, it’s what we’re all about at MediGap Advisors: Empowering our clients to take meaningful charge of their medical decisions.
Ready to talk to a Medicare expert about the MSA Plan? Our Personal Benefits Managers are standing by for your call. As usual, our services are free to you, and we’ll never push you into something you don’t need.
Call 800-913-3416 to get started.
Read more on our Medical MSA Plans page.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.