Medicare Medical Savings Account (MSA) plans must provide you with the same benefits as Original Medicare but may do so with different rules, restrictions, and costs. MSA plans can also offer additional benefits. Below is a list of general cost and coverage rules for MSA plans. Remember to speak to a plan representative to learn the details about any plan you are considering.
Also note that if you were enrolled in a Medigap policy before joining an MSA plan, you may keep your Medigap A Medigap is a supplemental health insurance policy that is sold by private insurance companies and works only with Original Medicare. Medigaps pay part or all of certain remaining costs after Original Medicare pays first. Depending on where you live and when you became eligible for Medicare, you have up to 10 different Medigap policies to choose from, each with a different set of standardized benefits. . However, your Medigap will not provide any coverage while you are enrolled in an MSA plan, and you must continue paying your Medigap .
Costs
- MSA plans typically do not charge a monthly premium in addition to the Part B Part B, also known as medical insurance, is the part of Medicare that covers most medically necessary doctors’ services, preventive care, hospital outpatient care, durable medical equipment (DME), laboratory tests, x-rays, mental health services, and some home health care and ambulance services. premium, but some may.
- MSA plans work with a high
deductible
The deductible is the amount you must pay for health care expenses before your health insurance begins to pay. Deductible amounts can change every year.
health plan (HDHP) and a bank account. Your plan deposits funds for your medical expenses into the bank account, and you can then use these funds to pay for care.
- You will likely have high out-of-pocket costs Out-of-pocket costs are health care costs that you must pay because Medicare or other health insurance does not cover them. for your care until you reach your deductible. After reaching your deductible, your MSA plan covers 100% of the cost for Medicare-covered services.
- Funds contributed to an MSA are not taxed as long as they are used to pay for qualified medical expenses.
- You can use MSA funds for other expenses, but those funds will be taxed and will not count toward your HDHP deductible.
- Any remaining money in your bank account at the end of the year remains in your account for the next year, in addition to your plan’s regular yearly contribution.
- If you join an MSA plan after January 1, your yearly deductible will be pro-rated to the number of months left in the year. For example, if your plan’s yearly deductible is $6,000 and your coverage starts September 1, your deductible for that year will be $2,000 (one-quarter of the yearly deductible).
- You keep any money left in the account if you leave your MSA plan at the end of the year. You will not be taxed if you use the money left in the account for qualified medical expenses.
- If you leave the plan midyear, part of the money will be refunded to Medicare depending on the number of months left in the year.
Providers
- MSA plans cover in-network care (if the plan has a network), as well as
out-of-network
Out-of-network means not part of a private health plan’s network of health care providers. If you use doctors, hospitals, or pharmacies that are not in your Medicare Advantage Plan or Part D plan’s network, you will likely have to pay the full cost out of pocket for the services you received.
care. However, you may pay a higher amount for out-of-network services.
- You pay the least when seeing In-Network In-network means part of a private health plan’s network of providers. If you use doctors, hospitals, pharmacies, home health agencies, skilled nursing facilities, and durable medical equipment suppliers that are in your Medicare Advantage Plan or Part D plan’s network, you will generally pay less than if you go to out-of-network providers. providers.
- If your plan does not have a Provider See Health Care Provider. network, you pay the least when seeing participating providers (providers who take assignment Take assignment is a term that means a provider accepts Medicare’s approved amount for a service or item as full payment. See also: Participating Provider and Non-Participating Provider. ). These providers will only charge the Medicare-approved amount See Approved Amount. .
- If you see non-participating providers, you may pay up to 15% more than the Medicare- approved amount The approved amount, also known as the Medicare-approved amount, is the fee that Medicare sets as how much a provider or supplier should be paid for a particular service or item. Original Medicare also calls this assignment. See also: Take Assignment, Participating Provider, and Non-Participating Provider. . The additional 15%, in addition to the Medicare-approved amount, counts toward meeting your deductible.
Benefits
- MSA plans do not provide Part D coverage, and you must join a stand-alone Part D Part D, also known as the Medicare prescription drug benefit, is the part of Medicare that provides prescription drug coverage. Part D is offered through private companies either as a stand-alone plan, for those enrolled in Original Medicare, or as a set of benefits included with a Medicare Advantage Plan. plan for such coverage. Out-of-pocket expenses for your prescription A prescription is an order for a health care service or drug written by a qualified health care professional. drugs do not count toward your MSA plan’s deductible.
- Your MSA plan may offer additional benefits, such as vision, hearing, and/or dental care. Check with the plan directly to learn about coverage rules and restrictions for any added benefits.
- You may be charged an additional premium if you choose to receive these benefits.
- Your out-of-pocket costs for these services count as qualified medical expenses, but they do not count toward your deductible.