A Medicare Medical Savings Account Plan is a type of Medicare Advantage plan that combines a high-deductible health insurance policy with a medical savings account (MSA). MSAs differ from regular Medicare Advantage plans in several key ways, which are detailed below.
But just like any other Medicare Advantage plan, the enrollment window to switch to a different plan — including an MSA plan if one is available in your area — runs from October 15 to December 7 each year. If you’re enrolled in Original Medicare or a regular Medicare Advantage plan and you’d like to consider an MSA plan instead for 2020, your window of opportunity continues until December 7, 2019. This window also allows you to enroll in a stand-alone Part D plan, which you’ll need to purchase in addition to the MSA plan since those do not include integrated Part D coverage.
How MSA plans work
In some ways, the concept of an MSA plan is similar to the HDHPs and HSAs that are available in for people who aren’t yet covered by Medicare. But HSA contributions can be made by an employer, the account owner, or anyone else who wants to contribute money to that person’s account. MSA deposits, on the other hand, are made by the Medicare Advantage plan using funds that Medicare has given the insurer — enrollees cannot contribute their own money (President Trump’s proposed 2020 budget calls for allowing Medicare MSA plan beneficiaries to contribute pre-tax money to their MSAs; critics contend that this would create a tax shelter for wealthy Medicare beneficiaries).
The person enrolled in the Medicare MSA plan can then use the money in the MSA if and when they have medical expenses during the year (see examples here of how this works). MSA withdrawals are not taxed as long as they’re used for qualified medical expenses (including out-of-pocket costs for Medicare-covered services as well as services that aren’t covered by Medicare). But if the money is withdrawn for anything other than a qualified medical expense, it would be subject to income tax plus a 50 percent penalty.
As is the case with HSAs, unused money remaining in the MSA at the end of the year will roll over to the next year. If the person keeps the MSA plan, the next year’s deposit will be added to the money that’s already in the account from the prior year’s deposit.
No integrated prescription coverage
Higher out-of-pocket costs than regular Medicare Advantage plans
Also unlike other Medicare Advantage plans, MSAs can have deductibles (and thus out-of-pocket maximums) well above the $6,700 out-of-pocket maximum that applies to regular Medicare Advantage plans. In 2020, the maximum allowable deductible for an MSA is $13,400, although many plans have deductibles well below this limit. And of course, the insurer’s contributions to the MSA itself will obviously help to reduce the enrollee’s actual out-of-pocket costs, since they can use the MSA money to cover some of their expenses.
Access to any doctors who accept Medicare
Unlike other Medicare Advantage plans, MSA plans do not require you to stay within the insurer’s provider network. You can see any doctor who accepts Medicare anywhere in the country, as is the case for people who are enrolled in Original Medicare.
Very few enrollees, but that might start to change
Although there are 22 million people enrolled in Medicare Advantage plans in 2019, only about 5,600 of them are enrolled in MSA plans.
There are four insurers that offer MSA plans: Network Health and Security Health Plan (both in Wisconsin), MVP Health Care (available in 39 counties in New York), and Lasso Healthcare, which offers plans in 17 states in 2019 and is adding nine more states in 2020.
In total, MSAs are available in 1,883 counties across 29 states in 2020, up from 1,262 counties in 19 states in 2019. You can see if any MSAs are available in your area by using Medicare’s plan finder tool or by reaching out to a health insurance broker who is certified to offer Medicare Advantage plans.