UPDATED Feb. 2, 2019. Medicare MSA Plans (Medical Savings Account Plans) is 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. Lasso Healthcare MSA is used for illustration.
Medicare MSA Plans – High-Deductible Health Plan
- The first part of Medicare MSA plan is a special type of high-deductible Medicare Advantage plan. The plan’s coverage begins only after you meet a high yearly deductible.
- 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 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.
- 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
- 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.
- 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.
- You may join the Medicare MSA plan during the Initial Enrollment Period (IEP) or the Medicare Open Enrollment Period. Enrollment is generally for one calendar year. You may leave your plan during the Medicare Open Enrollment Period (effective on January 1 of the following year) or at authorized SEP such as moving out of the service area.
To learn more, please read Medicare Medical Savings Account (MSA) Plans.
Medicare MSA Plans – Medical Savings Account
- The second part of Medicare MSA plan is a special type of savings account – Medical Savings Account. You need to set up 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 plan’s contribution is lower than the full deductible.
- The money in your account is not taxable as long as it is used for Qualified Medical Expenses. Depending on the vendor, Qualified Medical Expenses include not only costs covered by Original Medicare Part A and B, but also other costs not covered by Original Medicare, such as Part D prescription drugs, and services like dental, vision and long-term care.
- Only money spent for Medicare Part A and Part B services counts towards your deductible.
- Any money left in your Savings Account towards the end of the year can be rolled over into the next year. If you choose not to renew, the funds in the bank account are still yours.
Questions that should be asked when choosing MSA Plan
- Is there a 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 are extra services (non-Medicare) included? Are they free?
Is Medicare MSA Plan right for you?
An MSA plan offers a combination of unique features not available in other Medicare Advantage plans:
- It is the ONLY product that gives you money, and the ONLY product where you can potentially grow money over time
- MSA plan does not have a network; any provider accepting Medicare typically will accept MSA plan
- MSA plan provides substantial tax advantages: any Qualified Medical Expenses under IRS rules are tax-free.
You should seriously consider an MSA plan if:
- You prefer not to be limited to a network of providers or referral requirements.
- You are healthy enough, so you have a high probability that your yearly medical expenses will not exceed the plan’s contribution. Nevertheless, for protection, you need to have an additional plan to cover the difference between plan’s contribution and your plan deductible.
- In some cases, if the difference between plan’s contribution and the deductible is comparable with the cost of Medicare Supplement, MSA plan may be used as a replacement for Medicare Supplement (Medigap). There is no medical underwriting in MSA. Therefore, it provides an alternative for people who cannot enroll in a Medigap plan because of its medical underwriting requirements.
Lasso Healthcare MSA
The Lasso Healthcare MSA plan is a Medicare Medical Savings Account plan from Lasso Healthcare. It operates in 17 states, including the following states where Liberty Medicare operates: Delaware, Illinois, Maryland, and Pennsylvania. Below are the features of their MSA plan:
- Plan premium: $0
- Plan’s contribution to your Saving Account (yearly): $2,520
- Annual deductible: $6,700-$8,700 (depends on geographic area)
- Out-of-pocket expenses after the deductible is met: $0
- Plan acceptance: You may go to any doctor or medical facility that accepts Medicare and is willing to bill Lasso Healthcare. Lasso Healthcare pays the same as Medicare to providers.
- Taxation: All Qualified Medical Expenses (Medicare-covered expenses and other non-Medicare IRS Qualified Medical Expenses) are not taxed by IRA
- Extra Benefits: Gift Cards (total amount $225) for managing your health.
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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.