Medicare MSA Plans: FAQs

Medicare offers a variety of insurance plans to help ensure that people who are 65 years of age or older have the medical coverage that they need. These Medicare plans are administered by private insurance companies that have been contracted by the government.

Traditional Medicare includes Part A and Part B coverage. Part A covers inpatient bills that are considered medically necessary, such as hospital care and services received in a skilled nursing facility. However, Part B covers doctors' visits and other outpatient procedures. In addition, to these traditional options, Medicare offers Medicare Advantage Plans, which are also called Medicare Part C plans.

Medicare Advantage Plans provide Medicare Part A and Medicare Part B benefits. In addition, Advantage Plans may provide additional coverage for medical services, such as vision, auditory and dental care, which may not be covered by a traditional Medicare plan. Medicare Advantage plans may include preferred provider organization (PPO) options, health maintenance organization (HMO) options, fee-for-service plans and medical savings account (MSA) plans.

Here are a couple of questions and answers to help you understand a Medicare MSA Plan:

How does a Medicare MSA Plan work?

A Medicare MSA Plan works in a manner similar to the way that a medical flexible spending account works. Beneficiaries with this type of coverage can apply their plan funds to medical costs regardless of whether or not a provider is or is not a part of a particular network.  In addition, these accumulated funds can be used before or after a deductible has been met.

Where do the funds in the MSA come from?

Medicare releases a set amount of money for the plan each year for your health expenses. Some of this funding is deposited into your MSA.

What type of deductible is associated with a Medicare MSA plan?

Medicare MSA plans often have high deductibles. The coverage provided only begins to pay your medical bills after the high annual deductible has already been met.

What happens if your MSA is depleted?

If you run out of money in your MSA before your deductible is met, you will be responsible for paying the covered services out-of-pocket until your deductible has been satisfied. Still, you are only responsible for the Medicare-approved cost of the services.

Are there medical expenses that Medicare MSA Plans do not cover?

Medicare MSA Plans do not offer prescription drug coverage. This benefit is provided through Medicare Part D.

What happens to Medicare MSA funds that are unused by the end of the year?

Unused MSA money remains in the account for expenses that may be incurred in the future.

Medicare MSA Plans offer an alternative to traditional Medicare. If you are interested in enrolling in a Medicare MSA Plan, contact a company that offers Medicare insurance, such as Continental Insurance Agency, LLC.