MediGap Advisors Health & Wealth Newsletter
September 2021
Vol. 16, Issue 9
All About Medicare MSA Plans
One of the best reasons to switch to Medicare Advantage is to take advantage of a lower monthly premium. But with the Medicare MSA Plan, you’re not only bringing your premium down to $0, but you’re also getting your very own Medical Savings Account.
With Medicare’s Annual Enrollment Period rapidly approaching (October 15 – December 7th) we wanted to make sure that all of our friends and clients were properly introduced to the concept of the MSA.
Here’s what you need to know to decide if the MSA plan is right for you:
What is the Medicare MSA Plan?
A form of Medicare Advantage, the MSA Plan is comprised of two parts:
- High Deductible Medicare Advantage Insurance Plan. This plan covers everything that Original Medicare (Part A and B) does. All MSA Plans are standardized with a $0 monthly premium, and have no provider networks so you can choose any doctor that accepts Medicare.
- A Tax-Advantaged Medical Savings Account. Your MSA is funded by your Medicare Plan with an annual deposit. You control the funds in your MSA; As long as you use them for qualified medical expenses, you won’t have to pay taxes for it.
What Can an MSA Pay For?
The funds in your MSA are yours to control. But the only way to avoid paying a tax penalty is to use the funds for qualified medical expenses.
These include:
- Pre-deductible Part A & Part B medical costs
- Hearing exams and hearing aids
- Eye tests, prescription glasses, contact lenses, & laser eye surgery
- Dental work, fillings, braces, fluoride treatments, and orthodontics.
- Part D prescription drug premiums
- Over-the-counter (OTC) drugs and medicine
- Ambulance coinsurance
- Doctor-prescribed acupuncture and physical therapy
- Smoking cessation programs
- Inpatient alcoholism treatment
Who is the Medicare MSA Plan Good For?
The MSA Plan combines a $0 monthly premium with a specialized savings account. This makes it a good option for people who don’t use their coverage that much because they’re generally pretty healthy.
These people will be able to take advantage of both the monthly savings and the long-term earning potential of the MSA. By staying healthy, the MSA can be a healthy addition to any retirement plan, acting as a cash buffer between your savings account and unexpected medical costs.
But if you have existing health conditions, or you predict that you’ll be using your Medicare plan more and more, the MSA plan might not be the best option. The high deductible of this plan can be hard for some people to meet.
The best way to decide if the MSA is right for you is to run it by your Personal Benefits Manager.
You Can Switch to the Medicare MSA Plan Starting October 15th
If you’re enrolled in Original Medicare, or a different Medicare Advantage plan, the only time to switch to the MSA Plan is during Open Enrollment. The Medicare Open Enrollment Period begins on October 15th and extends through December 7th.
Starting on October 1st, you can get a no-cost, no-obligation consultation with your Personal Benefits Manager to discuss the MSA. We’ll review your needs and let you know if we think it’s a good match.
To your health and wealth,
Wiley P. Long, III
President – MediGap Advisors
