What is a Medicare Savings Account?

Premium Choice believes that a Medicare Savings Account (MSA) is a type of Medicare Advantage plan that combines a high-deductible health insurance policy with a medical savings account. The MSA plan deposits a sum of money into your account each year that partially covers your deductible. This money is yours to spend on qualified medical expenses - such as dental, vision and hearing costs, Part D prescription drug coverage, and a chiropractor's office visit.

The MSA plan also lets you save money by not paying a separate premium for the MSA. Funds you put in your MSA grow interest-free and tax-free, which means you can withdraw them without tax penalty as long as they are used to pay for medical expenses.

The MSA is a good option for people with Medicare who want to reduce their out-of-pocket healthcare costs. It provides peace of mind and stability to your healthcare budget, as you can see if you will make it through the year with only a small amount of out-of-pocket spending on healthcare.

If you have a high deductible, a traditional Medicare Advantage plan could be best instead of a Medicare MSA. This is because a Medicare Advantage plan has lower monthly premiums than a Medicare MSA plan, which can help avoid sticker shock at the start of the year.

Your MSA plan's deductible will differ from the deductible for traditional Medicare. The deductible for an MSA plan is often much higher than that for a Medicare Advantage plan, so you may want to compare both to determine which method will work best for you and your family.

You can change your MSA account and bank with a new plan, but it must be before the end of the calendar year. If you are changing your Medicare MSA to a different program, you must provide proof of enrollment in the new plan to the insurance carrier. You must notify the insurance carrier of your change in procedures before the end of the year and inform them within 30 days of changing plans.