Senior Insurance Blog

This New Medical Savings Account is a Compelling Medicare Alternative

This New Medical Savings Account is a Compelling Medicare Alternative

Are you Medicare eligible? If so, you don’t want to miss this compelling alternative to Original Medicare and traditional Medicare Advantage plans.

We’re excited to announce a brand new Medical Savings Account (MSA) that just became available on October 1, 2018.

This is the plan that had one of our licensed agents saying, “If you would’ve asked me last year what I would buy, I’d say a Plan G Medicare Supplement. Now, if I’m healthy and I’m turning 65, I’m going with the MSA.”

 Contact us to find out if the MSA plan is right for you

What is a Medical Savings Account (MSA)?

A Medical Savings Account is a $0 premium plan that combines high-deductible health coverage with a special medical savings account. You receive money in your account ($2,520 as of 2019), and you decide what healthcare services to spend it on.

That money comes from the government, is paid to the insurance company, and is then deposited in your special savings account.

There are no provider networks, and once you reach your plan deductible, your insurance pays 100% of your Medicare-covered expenses. Note that you are free to use that deposit to help pay for your deductible.

This brand-new plan is available in 17 states, and the deductible ranges from $6,700-$8,700 depending on which county you live in.

The new MSA can be purchased in the following states:

  1. Montana
  2. Wyoming
  3. North Dakota
  4. South Dakota
  5. Utah
  6. Arizona
  7. Kansas
  8. Texas
  9. Arkansas
  10. Mississippi
  11. Illinois
  12. Indiana
  13. Pennsylvania
  14. Maryland
  15. Delaware
  16. North Carolina
  17. Hawaii

Any money you don’t spend from your medical savings account will carry over year after year, which allows you to continue saving up for any major health needs down the line.

Also, if your account is over $2,000, you have the option to start earning interest on that money.

What is a medical savings account (MSA)?

What are the plan benefits of an MSA?

An MSA is not like a traditional insurance plan you might be used to.

When you receive your yearly deposit on January 1, you’re free to use that money for any medical services you want. Those can be Medicare-covered expenses or non-Medicare covered expenses.

Just know that non-Medicare covered expenses will not count toward your deductible.

Also, if you use the money from your MSA for expenses that are not considered qualified medical expenses by the IRS, you’d be subject to IRS taxes and penalties.

With an MSA, you have the freedom to use your deposit on things Medicare won’t cover, like:

  • Part D prescription drugs
  • Chiropractic services
  • Long-term care
  • Hearing aids
  • So much more

How does the whole claims process with the MSA?

The process of using an MSA is similar to that of an HSA – Health Savings Account – if you’ve ever had one.

You will get a debit card that’s linked to your medical savings account, and you can use that for your medical expenses.

For doctor visits, you’d simply go to the doctor, and they would send that bill to the insurance company. Note that there are no copays with the MSA plan.

The insurance company would then adjust that bill to match Medicare-approved rates, they’d check your progress towards your deductible, and they’ll send you a bill if you haven’t met your deductible yet.

You then have the choice to pay for that bill with your MSA funds or out of your pocket if you wish.

What about networks?

There are no provider networks with the new Medical Savings Account (MSA). You can go to any Medicare-participating provider.

Unlike traditional Medicare Advantage plans that have a very limited provider network, you’re free to see who you choose.

How does an MSA plan work with Medicare?

What happens to that money if I die?

The money in the medical savings account is yours to keep – forever.

If you pass away, that money will go to your beneficiary. You will define your beneficiary when you enroll in the plan.

How do I know if the MSA is the right choice for me?

As with most senior insurance products, a health plan is not one-size-fits-all. The MSA will not be the right choice for everyone, but for many individuals, this plan is the clear winner.

You’d be an ideal candidate for the MSA if:

  • You’re healthy and don’t go to the doctor often
  • You’d be able to handle the high deductible in an emergency
  • You’re uninsurable for whatever reason, but you’re still healthy
  • You receive health reimbursements from your employer for post-65 healthcare expenses

The biggest point here is that the MSA is ideal for someone who’s healthy. There’s so much potential for you to grow that savings account, and keep in mind that this is a $0 premium health plan.

Even if you only use $500 per year, you’re still leftover with $2,000 that will roll over to the next year, and the next year, and so on and so on.

That could never happen with a Medicare Supplement.

However, a Medicare Supplement is an excellent choice for someone who isn’t at their best health. A supplement does not have a high deductible, and in most cases, you don’t pay much of anything besides your monthly premium.

Both products have their place, but the MSA is a major standout for healthier individuals who want some potential for growth.

Still not sure if the MSA product makes sense for you? We can help.

 Ask us about the new MSA plan

Medicare is confusing. The more you seek out information, the more overwhelmed you feel. You're definitely not alone.

We work with your best interest in mind, so while the decision will always be up to you, you’ll be empowered with knowledge that you can really understand and get behind.

At Medicare Allies, you aren’t just another transaction or a number in a system. You are an individual, and we will continue to develop a relationship with you and be there for you when you need us in the future.

So don't be shy – let us serve you.

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