As a Medicare beneficiary, you have options when it comes to filling the gaps in your coverage, including Medicare Supplement Plans and Medicare Medical Savings Accounts (MSA). Both can help you save money on your medical expenses, and you might be wondering if you can have both at the same time, since you are probably looking to save as much money as possible! Unfortunately, depending on the circumstances, you might not be able to have both at the same time; to better understand how you can get optimum savings, you first have to understand how these two plans can save you money in different ways, which is a better fit for you, and how you can make them work together.
How A Medicare Medical Savings Account Works
Medicare Savings Account plans are two things: a special bank savings account and a type of high-deductible Medicare Advantage plan. Here’s how they work:
- The plan will deposit money it receives from Medicare into a bank account for you each year.
- You will be able to manage the money in the account and use it for qualified medical expenses before you meet your high annual deductible – essentially, you’ll be paying 100% of your medical costs upfront from the account until you reach your deductible. You should be aware that your deductible could be more than what you get in your bank account, so you should be able to cover the difference.
- Once you meet your high deductible, your plan will cover 100% of qualified expenses.
- You can choose to see any provider that accepts Medicare patients.
- Plans cover dental, vision, hearing, and long-term care, which Original Medicare does not.
- There is no premium; you continue to pay your monthly Part B premium to Medicare.
- The money you withdraw will be tax-free, and the account might accrue tax-free interest. The money rolls over each year.
- You may not deposit your own money into the account, and you will be penalized if you withdraw it for anything other than qualified medical expenses.
- In most cases, you cannot have other insurance that would cover medical costs before you meet the MSA’s yearly deductible, but there are certain circumstances when you can.
What Medicare Supplement Plans Cover
A Medicare Supplement Plan is a more traditional way to cover gaps in your Medicare coverage; these plans are offered by private insurance companies and work like individual health insurance. There are typically 10 different Medicare Supplement Plans on offer, depending on the state you live in; each offers a different level of coverage at a different price point. These plans cover some medical costs that are not covered by Medicare, including the 20% Part B coinsurance you are responsible for. Depending on the plan, it can help cover the costs of:
- Medicare Part A coinsurance and hospital costs (up to an additional 365 hospital days after Medicare benefits are used)
- Medicare Part B coinsurance or copayment
- The first three pints of blood for a medical procedure
- Part A hospice care coinsurance
- Skilled nursing facility coinsurance
- Part A deductible
- Part B excess charges
- Foreign travel emergencies
How A MSA & Medicare Supplement Plan Work Together
If you already have a Medicare Medical Savings Account, you cannot buy a Medicare Supplement Plan. However, if you already have a Medicare Supplement Plan, you do have the option of joining a Medicare MSA plan; in this case, you will be responsible for paying your premiums, as well as meeting your MSA plan’s deductible. You should be aware that, if you drop your Medicare Supplement Plan while you have a MSA, you might not be able to get your plan back; however, if it is your first time joining a MSA Plan, and you have had the MSA plan for less than a year, you can get your Medicare Supplement Plan back.
If you, like many Medicare beneficiaries, are living on a fixed income, you know how important it is to save as much money as you can on necessary things like medical expenses. While you might be tempted to get a MSA, you should first look into a Medicare Supplement Plan, since they offer a broader range of coverage. You’ll have 10 plans to choose from, and if you decide to add an MSA at a later date, you can still do so! If you’re not sure where to start, come to EZ: we can compare plans and their costs, as well as go over your budget and medical expenses in order to find a plan that meets your specific needs, while saving you money. To get free Medicare Supplement Plan quotes, simply enter your zip code in the bar above, or to speak to a local agent, call 888-753-7207.
