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–sometimes called a high-deductible health 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 likely 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 out of pocket on health care, you may be gambling with your health in a MSA plan or going into medical debt. If you can’t afford the high deductible, you may end up needing to forgo care. Even if you’re healthy today, keep in mind that insurance should protect you from unforeseeable health care needs, injuries or illnesses you never expected.
If you want to be sure that you can get the care you need when you need it, you are likely to be far better off getting traditional Medicare with supplemental insurance to fill the gaps. Here are five 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 may find that the Medicare Medical Savings Account plan delays or denies coverage for care your doctor says you need.
- You will need to pay for a Medicare Part D prescription drug plan unless you have drug coverage through another source.
- Before your coverage kicks in, 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 Medical Savings Account 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. Unless you have substantial assets to spend on health care, you 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 coverage gaps in the plan.
Here’s more from Just Care:
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Medicare ratings of Medicare Advantage plans a farce
- Ten ways Medicare Advantage plans differ from traditional Medicare
- Programs that lower your costs if you have Medicare
- How to get free or low-cost dental care