Medical Savings Account (MSA) Plans

What is a Medical Savings Account?

• A type of Medicare plan that combines a High Deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS).

Who owns the money that is deposited in the Medical Savings Account?

• The Medicare beneficiary owns the money and can use the money as he/she wishes and at their direction. If the money is used to pay for "Qualified Medical Expenses" as defined by the IRS, then the money is tax and penalty free.

What are Qualified Medical Expenses?

• As defined by the IRS in publications 969 and 502.

• Includes both Medicare covered and non-Medicare covered expenses.

Who can enroll in a Medical Savings Account (MSA) Plan?

• Be Medicare-eligible.

• Live in the MSA service area.

• Reside in the United States for 183 or more days during the calendar year.

• Not receive other health benefits that cover all or part of the annual MSA plan deductible, including benefits under an employer or union group, the Department of Defense (or TRICARE), the Department of Veteran Affairs or the Federal Employee Health Benefit Plan.

• Not be eligible for Medicaid.

• Not currently receive hospice benefits under Medicare.

• Not have end-stage renal disease; an exception is made if you have ESRD and were enrolled in another Medicare Advantage plan that left Medicare and you have not yet joined a new Medicare Advantage plan.