One type of Medicare Advantage plan is called a Medicare Medical Savings Account (MSA). These plans combine a high-deductible Medicare Advantage plan with a savings account to offer a unique way of paying for health care.
When you enroll in a Medicare Medical Savings Account, the Medicare MSA plan will designate an amount of money to be deposited into a savings account each year. You will then be able to use the money in this account to pay for covered health care services and products.
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Any unused money in your account at the end of the year will remain in your account and will be combined with the deposited money of the upcoming year, so the account has the ability to grow over time.
Money that is deposited into your Medicare Advantage MSA plan account that is used for qualified medical expenses through the year is not subject to taxes.
You must be enrolled in Medicare Part A and Part B in order to be eligible for a Medicare Medical Savings Account.
Many Medicare Advantage plans do not allow enrollment for beneficiaries who have End-Stage Renal Disease (ESRD). Some Medicare Advantage plans called Medicare Special Needs Plans (SNP) may grant you enrollment if you have ESRD.
MSA plans may not require you to pay a monthly premium. However, like other types of Medicare Advantage plans, you must continue to pay your Medicare Part B premium (and Part A premium, if applicable).
Medicare MSA plans include a deductible that is greater than the amount of money that the Medicare MSA plan deposits into the account. The money deposited into your account can be used toward the plan deductible before the plan’s additional coverage kicks in.
If you exhaust all of the deposited money in your account and still have additional health care costs, you will likely have to pay out of pocket for covered care until you reach your deductible.
If you do have to pay out of pocket to reach your deductible, health care providers are only allowed to charge you the Medicare-approved amount for the services they provide.
Some Medicare MSA plans may include networks of preferred health care providers and facilities, but MSA plan holders can generally receive approved care from any provider who accepts Medicare.
Medicare MSA plans do not require you to select a primary care physician or seek a referral to see a specialist.
Medicare Medical Savings Accounts include all the same benefits covered by Original Medicare (Medicare Part A and B).
Medicare Advantage MSA plans may also provide coverage for benefits not offered by Original Medicare. These additional benefits can include:
MSA plans do not provide coverage for prescription drugs. If you wish to enroll in Medicare prescription drug coverage, you may enroll in a Medicare Part D plan in addition to your Medicare Advantage MSA plan.
Read additional medicare costs guides to learn more about Medicare costs and how they will affect you.
In most cases, you may enroll in a Medicare MSA plan when you first become eligible for Medicare or during the Fall Medicare Open Enrollment Period that lasts from October 15 to December 7 each year.
Other types of Medicare Advantage plans you might consider include:
To learn more about Medicare Advantage MSA plans, including which Medicare Advantage MSA plans may be available for sale near you and how you can enroll, speak with a licensed insurance agent by calling TTY Users: 711 24 hours a day, 7 days a week.
1 Medicare.gov. Medicare Medical Savings Account (MSA) Plans. Retrieved from www.medicare.gov/sign-up-change-plans/medicare-health-plans/medicare-savings-accounts/medical-savings-account-plans.html.
MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
Medicare MSA Plans don’t cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate Medicare Prescription Drug Plan.
There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan at 1-800-000-0000, TTY 711 for additional information.
You must continue to pay your Part B premium. $0 premium plans may not be available in all areas.
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. He currently lives in Raleigh, NC.
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