MSA’s, or Medical Savings Accounts, in a broad sense, are savings programs that allow savers to make tax-free withdrawals for qualified medical health care expenses. To list what “qualifies” would take quite awhile as it varies from plan to plan. It’s safe to say that most legitimate medical expenses can be covered in part by a good MSA coupled with a great insurance plan–expenses related to disability, dental care, vision care and long-term health care
MSA’s need to be coupled with HDHP’s, or High Deductible Health Plans. The HDHP will cover expenses not covered by the MSA. Withdrawals go towards paying the deductible expenses each year. Any money left over in the MSA at year’s end will either roll over into the next year, or it can be taken out as taxable income
The MSA has become less popular in most states than it once was, but remains prevalent in California where many people still invest in these types of savings accounts. MSA’s are most common among self-employed individuals who cannot rely on an employer’s health care plan in order to meet their medical needs
Medicare MSA’s are a popular choice for many Californians looking for a good, all-encompassing health plan. Medicare MSA’s differ on a few key points from general MSA’s. The most important difference is, of course, that you need to be covered by an HDHP that Medicare deals with, as you need to be covered through Medicare
MSA’s are a great option for those who are self-employed and need to make sure that they can cover all of their medical expenses, but there are downsides and not everyone will want to employ an MSA. For instance, many find that their medical expenses simply exceed what they can afford to invest into their MSA, with or without tax-free withdrawal
Medicare MSA’s don’t typically cover Medicare part D prescription drugs, and that can be a deal breaker for many looking for good insurance coverage who have significant prescription medication needs.
On the other hand, there’s no real one-size-fits-all Medicare MSA plan, and you can typically arrange for an MSA plan that will cover all of your specific needs. If you need to make specific demands of your healthcare plan in order to cover vision, dental needs or existing conditions, you can talk with a Medicare representative to find the plan that’s specifically geared toward your medical demands.
Finally, there is some flexibility when it comes time to pick your insurance provider. Although Medicare MSA’s will only provide coverage through the companies that they do business with, Medicare works with a wide range of insurers including specialty insurance providers, so it shouldn’t be hard to find a policy and a provider that work for you.
If you’re considering a new health insurance plan, a Medicare MSA may be exactly what you’re looking for. Contact a Medicare representative and see if they can connect you with what you need so that you can put your savings to work for you.