Medicare Medical Savings Account (MSA) plans are a kind of Medicare Advantage plan sold by Medicare-approved insurance carriers. MSA plans are required to provide you with the same coverage as Original Medicare, but they have additional benefits, too. Our Medicare agents are here to inform you so you can see if these insurance policies are a good fit for you.
How a Medicare MSA Plan Works
MSA plans present a high deductible health plan (HDHP) and a bank account to help cover your medical costs. HDHPs contain a large deductible that you must pay in full in order to get coverage. After you pay off this deductible, the HDHP covers ALL of your expenses for the rest of the year.
As mentioned, MSA plans also include a bank account. In this account, the plan provider collects funds annually for your medical expenses. Later, you can use these funds to take care of the deductible. Just be aware that the amount the plan provider pitches in is less than the deductible.
What Else Should I Know About MSA Plans?
- To be in a MSA plan, you must remain enrolled in Original Medicare.
- You are banned from personally depositing more money into your MSA bank account. Once you have used up all the money, you pay out-of-pocket until you meet the deductible.
- Any money leftover at the end of the year will stay in the account for the next year.
- As long as the deposited funds are used for qualified medical expenses, they’re not taxed.
- MSA plans can’t include Part D prescription drug coverage. If you want this coverage, you must enroll in a standalone Part D plan.
- If you choose to join a Part D plan, out-of-pocket costs associated with the prescription drug plan will not go toward your MSA plan’s deductible.
- MSA plans normally have provider networks which must cover out-of-network care. However, you might pay a heavy price.
What MSA Plans Cover
As mentioned, a Medicare Medical Savings Account is a kind of Medicare Advantage plan. It offers additional benefits that Original Medicare doesn’t, which may include:
- over-the-counter drugs
- adult day-care services
- fitness memberships
- nutrition and wellness programs
- transportation to doctor’s offices
- And more
Your eligibility for plan benefits depends on your area and plan providers. Also, any out-of-pocket costs associated with these added benefits count as qualified medical costs. However, they don’t count toward your deductible.
When to Enroll in a Medicare MSA Plan
Enrollment for a MSA plan will work the same as the other Medicare Advantage plans.
If you’re eligible for Medicare, you’re eligible for a Medicare Advantage plan. But, there are set times for when you can enroll:
Initial Coverage Election Period (ICEP)
ICEP is your first chance to select a Medicare health plan. This seven-month period begins three months before the month you turn 65 and ends three months after the month you turn 65. If you’re under 65 and you get Social Security disability, you’re eligible for Medicare in the 25th month after you start receiving your Social Security benefits.
Annual Election Period (AEP)
The AEP, aka open enrollment, runs from October 15 to December 7 every year. Once January comes, coverage for your chosen Medicare Advantage plan will ensue. During the AEP, you can also add, switch, or drop current coverage.
Medicare Advantage Open Enrollment Period
During this time, you can switch to another Medicare Advantage plan if you wish. Or, you can cancel your plan to return to Original Medicare.
Special Election Period
Many things can spur a special election period and they’re specific to an individual. You should speak with a licensed Medicare insurance agent to see if you qualify. There are a few common scenarios, like if you move out of state, move into a nursing home, or qualify for additional aid, you may be eligible for this special election period. You can implement changes to your Medicare Advantage plan during this period or revert back to Original Medicare.
The agents at Cornerstone Senior Advisors are here to answer your questions about MSA plans. Call (316) 260-3331 to request a quote or schedule an appointment.