What Do MSA Plans Cover?

While we’re in the thick of Medicare’s Annual Election Period, now is a great time to introduce you to a kind of Medicare Advantage plan you may not have come across: Medicare Medical Savings Account (MSA) plans. Today we’re going to uncover what an MSA plan is and what MSA plans cover.

What Are MSA Plans?

As we mentioned, an MSA (Medicare Medical Savings Account) plan is a type of Medicare Advantage plan. If you are familiar with traditional high-deductible health plans, you’ll have no trouble understanding MSA plans as they are very similar.

All MSA plans are high-deductible insurance plans that come with a savings account that aims to help you pay the deductible. For example, you may find an MSA plan in your area with a $5,000 deductible. All expenses are your responsibility until you meet that $5,000. Once you do, approved services are 100% covered by the plan.

With that plan, the carrier may offer you a savings account with $3,000 deposited into it. You may use that $3,000 as needed to help you reach the deductible, or you can save it and roll it over for next year. The biggest difference between an MSA and an HSA is that you (as an individual member) cannot contribute money to the account. Some plans do allow you to invest the funds as you would with a traditional Health Savings Account.

MSA Plan Benefits

Like all other Medicare Advantage plans, MSA plans must offer at least as much coverage as Original Medicare (Parts A and B). Unlike other Medicare Advantage plans, they don’t often include many extra benefits.

For example, MSA plans do not include any prescription drug coverage. However, you are allowed to enroll in a separate Part D prescription drug plan to gain these benefits. It’s not common for MSAs to include routine dental, vision, or hearing coverage, either. Think of an MSA plan as very much like Parts A and B, but with a higher annual deductible.

The great thing about MSA plans is that they all have $0 monthly premiums. If you are someone who does not need regular medical care, you may enjoy not only the monthly savings, but also the savings account aspect. If you don’t use your account for several years, you’ll have a sizable savings you can use on future healthcare expenses. If you disenroll from the plan in the future, the savings account is still yours to use.

One thing our MSA clients find helpful is to add a Hospital Indemnity Plan (HIP) to their MSA plan - or any Medicare Advantage plan. A hospital indemnity plan pays you when certain things happen - like emergency room visits, inpatient stays, ambulance rides, and more. You can use those payments to supplement your deductible expenses. Hospital indemnity plans do require a monthly premium, but they are often quite affordable.

Find a Medicare Advantage Plan Near You

Whether you think an MSA plan is right for you or you want to know what other Medicare Advantage plans are in your area, you can call the Local Medicare Specialists. Our team of Medicare advisors near you will help you decide if an MSA plan is right for you and offer alternative options for you to consider. Call today to speak with an advisor in your area.