Some private insurance companies offer health care coverage through Medicare Medical Savings Account (MSA) Plans. Similar to a Health Savings Account (HSA), a MSA allows enrollees to pay for healthcare costs through a dedicated savings account. These unique plans can help protect you from high health care costs and give you control over your health care spending.
What Is a Medicare MSA Plan?
Medicare MSAs are paired with a high-deductible Medicare Advantage policy. This combination is designed to allow enrollees to use their MSA to pay for health care expenses until they meet their deductible. Medicare Part A and Part B expenses you pay for with your MSA and out-of-pocket both count towards your yearly deductible. After you reach your deductible, your Advantage Plan will pay for your Medicare-covered health care expenses.
Some Medicare MSA Plans also include coverage for health care services like hearing, vision, or dental. Check with your carrier or
reach out
to one of our Medicare advisors to learn more about these kinds of coverage. While these monthly premiums are optional, all MSA Plan enrollees are responsible for their
monthly Part B premium.
How MSA Plans Work
Your plan receives funding from Medicare, which they then deposit into your Medical Savings Account. These funds are deposited the first month your coverage begins, and then at the beginning of each calendar year. Both the amount of money provided for your MSA and your deductible will depend on the carrier and plan you choose.
If you have funds left in your MSA at the end of the year, that money rolls over into the next year. Your annual deposit will not be decreased if you have funds rolling over from a previous year. One key difference between a Medicare MSA and non-Medicare HSA: you as an individual cannot make deposits into the savings account. If your MSA account balance reaches zero and you have not met your deductible, you will have to pay out of pocket for your healthcare expenses until your deductible is met.
Managing Your MSA
While Medicare MSA Plans offer a lot of flexibility, you are responsible for managing how the funds are spent. Only expenses normally covered by Medicare Part A and B will count towards your Medicare Advantage Plan deductible. You can use your MSA to pay for expenses outside of these categories, but they will not bring you closer to reaching your deductible. This includes using your MSA for prescription drug copayments.
Be sure to keep record of the health care expenses you pay for with your MSA. You will receive a form from your plan at the end of the year to file with your taxes. It’s up to you to provide documentation that the MSA funds were used for Qualified Medical Expenses. If you use MSA funds for non-qualified expenses, those amounts will be counted as part of your annual income and taxed accordingly. You may also face additional tax penalties for using MSA funds for non-medical expenses.
If you’re considering a Medicare MSA Plan, we’d love to hear from you! You can also view the policies available in your area through our enrollment portal. A Senior Insurance Advisors agent can help you find the right coverage for your unique budget and healthcare needs. Our consultations are available at no cost to you and we’re proud to provide ongoing support to all of our clients.









