Medicare Medical Savings Account Plans (MSA Plans) are one of the Medicare Advantage (MA) Plan types. However, it is quite different from the traditional HMO and PPO MA Plans. The major features of MSA plans are described below. The Geisinger Gold MSA Plan is used for illustration.
Medicare Medical Savings Account Plans (MSA Plans) Basics
The MSA plan does not require the use of a network of medical providers. You may go to ANY doctor or hospital that accepts Medicare and is willing to bill the plan for its services. No referrals are needed. Most plans pay providers the same fee as Medicare, but some plans may have preferred doctors and hospitals with a reduced cost.
Medicare MSA plans have two parts: High-Deductible Medicare Advantage (MA) Plan and Medical Savings Account.
You are responsible for paying all Medicare bills before you meet the deductible. You may use funds from your Savings Account (see below), or, if there are no more funds, pay out-of-pocket. During this time you cannot be charged more than the Medicare-approved amount. Once you’ve met the deductible, a high-deductible MA plan covers ALL Medicare Part A and B services. There is no monthly premium for the plan, but you need to continue to pay the monthly Part B premium.
Medicare MSA plans do not cover prescription drugs. You’ll need to buy a Part D Prescription Drug Plan separately. You may use you the money in your Savings Account for the Part D copayments, but that money doesn’t count towards your plan deductible.
Yearly deductibles vary by plan. Some plans may cover extra benefits such as dental, vision, or long-term care not covered by Medicare, and some plans may even offer additional benefits at extra cost.
You may join Medicare MSA plan during the Initial Enrollment Period (IEP) or the Annual Enrollment Period (AEP). Enrollment is generally for one calendar year. You may leave your plan during the AEP (effective on January 1 of the following year). However you cannot leave your plan during the Medicare Advantage Disenrollment Period (MAPD).
To learn more, please read Your Guide to Medicare Medical Savings Account (MSA) Plans.
Medical Savings Account
You need to set up the special Medical Savings Account with a bank selected by MSA plan. The Medicare MSA plan deposits money (provided by Medicare) into your Savings Account once a year to pay for your health care costs before you meet the deductible. The money in your account is not taxable as long as it is used for health care costs, including costs not covered by Medicare. Only money spent for Medicare Part A and B services count towards your deductible. Any money left in your Savings Account towards the end of the year is kept for the following year.
Questions that should be asked when choosing MSA Plan
- Is there MSA plan in my area?
- What is the plan’s deductible? What services count towards my deductible?
- How much will the plan contribute to my Savings Account every year?
- What are my costs after I meet the deductible?
- What extra services (non-Medicare) are included? Are they free?
Is Medicare Medical Savings Account Plan right for you?
You should seriously consider an MSA plan if you prefer not to be limited to a network of providers or referral requirements.
It may have serious advantages compared to traditional Medicare Advantage plans (HMO, PPO). Not only is there no network but your overall cost may also be substantially lower. This is particularly true for people with high medical expenses. Out of pocket costs for traditional MA plans may go as high as $6,700 per year. Your MSA costs may be substantially lower depending on the following three factors:
- Your plan’s deductible
- How much your plan contributes to your Saving Account
- Your out-of-pocket expenses after you meet the deductible
In the case of the Geisinger Gold MSA plan, the maximum amount you pay out-of-pocket per year is $1,500 – a substantially lower cost than the standard $6,700 maximum.
The MSA plan may also be a good alternative to the Medicare Supplement (Medigap) plan. It costs less than the average Medigap plan, and it also has one essential advantage over the Medigap plans – there is no need for medical underwriting.
A word of caution. The MSA plan does not have a contract with Medicare. You may go to any doctor who accepts Medicare, but they need to be willing to bill the insurance company for their services. Because companies pay Medicare fees to providers, this is rarely a problem. Nevertheless, always check with your provider to see whether or not they are willing to bill the insurance MSA plan. It seems to us that the advantages described above far outweigh the concerns noted here.
Geisinger Gold MSA
The Geisinger Gold Reserve MSA is a Medicare Medical Savings Account plan from Geisinger Gold. It operates in Pennsylvania, and is known for its high quality of service. Below are the features of their MSA plan:
- Plan premium: $0
- Annual deductible: $3,000
- Plan’s contribution to your Saving Account (yearly): $1,500
- Out-of-pocket expenses after deductible is met: $0
- Plan acceptance: You may go to any doctor or medical facility that accepts Medicare and is willing to bill Geisinger Health Plan. Geisinger pays the same as Medicare to providers.
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For help finding the best Medicare or Individual Health Plan for you, please contact Liberty Medicare or call us at 877-657-7477.