There are several types of Medicare Advantage Plans. Private insurance companies offer MSA (Medical Savings Account) plans.
MSA plans are a unique type of plan, so let’s talk about how they work.
How does a Medicare Medical Savings account work?
If you had an HSA (Health Savings Account) plan prior to retirement, you’d be somewhat familiar with how an MSA (Medical Savings Account) works.
MSA plans have a high deductible. To offset this, they also have a bank account associated with them. The plan’s carrier will deposit funds into this bank account each year, which can then be used to pay for costs associated with the deductible.
These funds are used tax-free as long as they are for qualified medical expenses. You cannot personally contribute to this bank account, but if you have money left at the end of the benefit year, it will roll over to the next year.
MSA plan holders will pay 100% of the costs of services until the deductible is met. After members have met their deductible, the MSA plan will cover costs at 100%.
Most MSA plans provide the most coverage if you receive care from an in-network provider, but a lower amount of coverage may also apply to out-of-network services.
No MSA plan offers prescription drug coverage. MSA policyholders will need to enroll in a separate Part D plan. The out-of-pocket costs for prescriptions covered by the Part D plan do not apply to the MSA’s deductible.
*It’s important to note that the amount the carrier deposits into an MSA will always be less than the plan’s deductible.
What do MSA plans cover?
Medicare Advantage plans offer additional benefits not covered in Original Medicare. These additional benefits apply to Medicare Advantage MSA plans.
- dental care
- hearing exams
- hearing aids
- vision exams
- glasses or contact lenses
- gym memberships
- wellness and nutrition programs
- over-the-counter drugs
- prescription drugs
- adult daycare
- transportation to doctor visits
- services for chronic conditions
The specific benefits and coverage levels for services like these will vary by plan. These services that a member pays out-of-pocket for qualify as medical expenses but do not count towards the MSA deductible.
When can I enroll in a Medicare Medical Savings account?
Once you are enrolled in both Medicare Parts A and B, you can also enroll in a Medicare Advantage plan. There are specific enrollment periods that apply to Medicare Advantage plans.
Initial Election Period
Each individual has their own Initial Election Period. This period begins 3 months prior to your 65th birthday and extends 3 months after your 65th birthday, for a total period of seven months.
If you are receiving disability benefits from Social Security, you are eligible for Medicare after receiving disability benefits for 24 months. You may apply for an MA plan three months prior to your eligibility date (which would begin on the 25th month of your disability benefits). This enrollment period extends to three months after your eligibility date.
Special Election Period
To qualify for a Special Election Period, you must meet certain requirements. The most common way individuals qualify is if they postpone enrollment into Original Medicare because they have other creditable insurance coverage. Once the individual enrolls in Original Medicare, they are also eligible to enroll in Medicare Advantage.
Other qualifying events include moving outside your plan’s coverage area, your plan getting terminated for reasons outside of your control, or you qualify for Extra Help.
To find out if you qualify for a Special Election Period, give Senior Benefit Solutions a call!
Annual Election Period
The Annual Election Period (AEP) occurs each fall from October 15 through December 7. During this time, you can choose to change or drop your current Part C plan. Your new coverage will begin on January 1.
Medicare Advantage Open Enrollment Period
This is often confused with AEP. However, there are additional things you can do during the Open Enrollment Period, which runs from January 1 through March 31 each year.
During Open Enrollment, you may disenroll in your current MA plan and switch back to Original Medicare. The opposite is also true – you may switch from Original Medicare to Medicare Advantage.
You may also switch MA plans, disenroll from your Part D prescription drug plan, and switch from your current Part D plan to another Part D plan.