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Medicare Savings Account Plan

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Medicare Advantage plans are offered by private insurers that allow recipients of Medicare to purchase additional supplemental healthcare. One of the newest types of Medicare Advantage plans is the Medicare Savings Accounts (MSA). Medicare Savings Accounts have a high yearly deductible usually thousands of dollars. This individual health insurance deductible must be paid before Medicare will cover any healthcare expenses. Each year the MSA plan makes deposits into an account that is accessible to you. The money in the account can be used for approved medical expenses including doctor visits and medical tests. The money, if any remains at the end of the year, is left in the account for next years future expenses. The additional benefit to the Medicare Savings Account Plan is the other insurance services it offers outside of Medicare. These services include vision and dental care.

There are also tax advantages as the money in the account is not taxed on approved Medicare expenses. The money also counts against the yearly deductible. If the money is spent on unapproved expenses, it still is not taxed but it does not count against the plan’s deductible. If spent on unapproved expenses, the penalty is 50% and becomes taxable income. MSA plans do not offer enough money to pay the entire health insurance deductible each year. Therefore, if your medical expenses are larger than your MSA, you will need to pay the difference.


Key supplemental health care questions

Here are a few questions to ask when deciding if the Medicare Savings Account plan is right you or your loved one:

How do I access MSA account to pay for the expenses?

How much money will I receive in the account each year?

What are the Medicare approved services for the MSA plan?

What is the yearly deductible with this plan?


With the Medicare Savings Account plan it is important to note that Medicare Part B premiums must still be paid. The MSA plans also do not cover prescription drugs. Individuals enrolled in this plan will need to also enroll in a Medicare Prescription Drug Plan for this type of coverage. Also enrollees are not

allowed to make deposits into this account. Every year the amount deposited into the account is subject to change. Like all Medicare Advantage plans, the Medical Savings Account plan covers the services offered through the Original Medicare Parts A and B. There are no additional plan premiums to pay when you enroll in the Medicare Savings Account plan.