Medicare Medical Savings Account

Medicare Medical Savings Account Plans

Medicare medical savings account plans (or Medicare MSA Plans) are plans offered by private insurance companies that the federal government partners with to offer Medicare benefits. Medicare MSA plans are required to offer the same amount of coverage as Original Medicare, but many Medicare MSA plans offer additional benefits, such as vision and hearing care, as well as long-term care, which makes them appealing for many. 

Here’s what you need to know about MSAs.

How Medicare Medical Savings Account Plans Work

Similar to a health savings account (HSA), Medicare MSA plans combine a high-deductible plan with a savings account to help pay for qualifying medical expenses.

  • High-deductible Health Plan: You must have a high-deductible Medicare Advantage plan (Medicare Part C). Coverage will not kick in until you meet your deductible, and of course, your deductible will vary depending on the plan you have. After you meet that deductible, your plan will cover the rest of your medical expenses 100%.

  • Medicare Medical Savings Account: The Medicare MSA plan will deposit a pre-determined amount of money into your medical savings account yearly, and that money can be used to pay for medical expenses while you’re waiting to hit your deductible. The money in these MSA accounts grows tax-deferred and can be withdrawn tax-free to pay for medical expenses. If the money is not used, it simply rolls over for the next year. 

  • It’s important to note that, unlike an HSA where you can contribute to the savings account, you cannot add money to the MSA. Once you’ve used the money, you must pay out-of-pocket until you meet your deductible. 

Requirements for Signing Up for a Medicare MSA Plan

  • You must be enrolled in both Medicare A and B.
  • You cannot enroll if you have any other insurance, like Medicaid, employee or retirement insurance, or veterans’ affairs (VA) benefits. 

Things to be aware of

  • Medicare MSA plans do not offer Medicare Part D prescription coverage. If you’re looking for prescription coverage, you must sign up for a stand-alone Medicare Part D plan. 
  • You will generally have to continue to pay for your Medicare Part B premium. In addition, Medicare MSA plans may have an additional premium the beneficiary must pay. 
  • Some Medicare MSA plans have networks, but not all of them. This varies depending on the plan. 

Who benefits from having a Medicare Medical Savings Account?

Medicare MSA plans are a fantastic option for people who don’t tend to use a lot of medical services and would like a way to build up additional funds to cover medical expenses.

You can sign up for a Medicare MSA plan when you sign up for Medicare A and B, or during open enrollment in the fall like every other Medicare plan. 

Medigap Advisors offers Medicare MSA plans, so if you’re interested, we would love to talk to you more about them. Schedule an appointment with your Personal Benefits Manager to get that dialogue started, or you can call us anytime with any questions.