If you’re thinking about signing up for a Medicare Medical Savings Account (MSA) plan, you might want to think again. A Medicare MSA plan is a type of private Medicare Advantage plan that can require you to spend thousands of dollars out of pocket before it will cover your health care. While your health plan sets aside some money in a Medical Savings Account to cover some of your healthcare expenses, it is far less than you will need to pay before your health plan will begin covering your care.
Unless you have thousands of dollars to spend on health care, you may be gambling with your health in a MSA plan or going into medical debt. You are likely to be far better off getting traditional Medicare with supplemental insurance to fill the gaps. Here are three reasons why.
- The Medicare Medical Savings Account plan deductible (or amount you must pay out of pocket before your coverage begins) could be $4000 or more. While your health plan will put some money into your MSA to cover a part of the deductible, it could be as little as $1000 or less. So, you could pay $3000 of your own money on top of the money in the MSA to reach the deductible and receive coverage from your plan.
- If you spend the money in your Medical Savings Account on health-care services Medicare does not cover, such as dental care or vision care, the costs will not count towards your deductible.
- You will need to pay for a Medicare Part D prescription drug plan unless you have drug coverage through another source.
- You can see any doctor that takes Medicare and pay with the money in your MSA. But, if you need a few thousand dollars worth of care, you will likely need to spend a bunch of your own money before your coverage kicks in. And, if you are in a serious accident or diagnosed with a costly condition, you will need to make sure the doctors and hospitals you use are willing to accept payment from your health plan.
While people with employer coverage are seeing huge increases in their deductibles and often have no choice but to accept them, people with Medicare can avoid them and likely should.
NB: People with Medicaid, Veterans’ Benefits, Federal Employee Health Benefits and many types of employer and retiree coverage cannot join a Medicare Medical Savings Account plan. And, people in a Medicare Medical Savings Account Plan will not be able to use Medicare supplemental insurance or most other insurance to fill gaps in the plan.
For more information about these plans, visit Medicare Interactive.