Medicare Medical Savings Account
A Medicare Advantage Plan is a Medicare-approved, private insurance option that offers more coverage options to consumers. There are six different types of Medicare Advantage Plans. A Medical Savings Account (MSA) is one type. It has a different structure when it comes to coverage than the other plans.
MSA Overview
An MSA is a type of plan that combines high-deductible health plans with a bank account. Essentially, the insurer puts money into a medical savings bank account. You can then use this money to pay for your healthcare throughout the year. After you use up the savings account, you must then pay out-of-pocket until you meet your deductible. After you meet your annual deductible, your insurer will start paying your benefits.
Using a Medicare MSA, you receive coverage for Medicare Parts A and B. However, you do not receive prescription drug coverage with an MSA. This plan has a higher deductible than the Original Medicare plan, so it may not be the best plan for someone who has chronic illnesses that require robust coverage.
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Pros and Cons of MSA
An MSA is a good plan for someone who wants extra benefits but anticipates basic medical needs. For example, many MSA plans cover dental and vision. They are relatively low cost if you do not anticipate exceeding the amount depositing the medical savings bank account.
The cons of an MSA are that it may cost more money than other plans if you need more than basic medical care. While the deductible varies by plan and by year, it is generally a high deductible. Additionally, most MSAs do not offer prescription drug coverage, meaning that consumers have to purchase that as a separate option. This adds to the monthly premium.
While an MSA is an adequate plan for someone who anticipates basic healthcare needs, it may not be the best plan for someone with chronic illnesses. Understanding your needs will help you choose the plan that is right for you.
