What is a Medicare Savings Account?

12/03/2020 11:53 Comment(s)

High Deductible Health Plans Are Also Available to Medicare Beneficiaries

High deductible health plans are becoming more and more popular in the work place and now they're becoming prevalent in Medicare too. Here's how they work:

Sign up for a MSA plan

When you sign up for a MSA Plan, you're enrolled in a high deductible Medicare plan and a Medicare Savings Account will be established for you.

Plan funds your account

The carrier funds your account for you. Deposits typically range from $2,000 to $3,000 and can even be invested in the stock market so you could earn more than the deposit amount.

Use your MSA funds to pay your deductible.

Use the funds that were deposited for you to pay qualified medical expenses until the deductible has been met.

Plan pays once your deductible is met.

After you've met your deductible, the plan pays the rest of your medical bills for the year.

Medicare Savings Accounts are an excellent option. Medicare beneficiaries who enjoy investing their money are able to invest the deposits in some MSA plans and can earn even more on those funds. It's also important to know that MSA funds don't "expire" at the end of the year (like a FSA account does). As long as you enroll in the MSA again the following year, anything you don't use remains in your account in addition to the next year's deposit.

Learn About MSA Plans

While a MSA plan can be a great option for many seniors, there are two things to consider:

Prescription Drug coverage is not included so you'll need to enroll in a standalone prescription drug plan to avoid late enrollment penalties down the road.
MSA plans are compatible with hospital indemnity plans so, if you're concerned about a $2,000 (or higher) deductible, there are low-cost options to help cover these deductibles.