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Examples of Medicare Medical Savings Account (MSA) plans

Remember, these are only examples. Plans vary and actual deposit and deductible amounts may be different from these examples. Contact the plan in your area to get actual deposit, deductible, copayments, and out-of-pocket maximum information. Find plans in your area.

Mr. Jones and Mrs. Martinez are interested in joining Medicare MSA Plans. Plans ABC and XYZ are available in their area.

Note

These are just examples of plans.

 PLAN ABCPLAN XYZ
Yearly deposit$2,500$1,500
Yearly deductible$4,000$3,000
What you pay after the deductible$0$0
Out-of-pocket maximum$4,000 (same as deductible)$3,000 (same as deductible)

If Mr. Jones joins Plan ABC:

  • Plan ABC deposits $2,500 into his account at the beginning of the year.
  • If he uses the money in his account for Medicare-covered Part A and Part B services, he'll have to spend $1,500 out-of-pocket before he meets his deductible and before the Medicare MSA Plan will begin paying for his health care.
  • Once Mr. Jones has met his deductible, Plan ABC pays all of his Medicare-covered Part A and Part B health care, and he pays nothing.
  • Mr. Jones must continue to pay the monthly Part B premium.  

If Mrs. Martinez joins Plan XYZ:

  • Plan XYZ deposits $1,500 into her account at the beginning of the year.
  • If she uses the money in her account for Medicare-covered Part A and Part B services, she will have to spend $1,500 out-of-pocket before she meets her deductible and before the Medicare MSA Plan will begin paying for her health care.
  • Once Mrs. Martinez has met her deductible, Plan XYZ pays all of her Medicare-covered Part A and Part B health care costs, and she pays nothing.
  • Mrs. Martinez must continue to pay the monthly Part B premium.  
Note

These are just examples of plans.

Mrs. Chang joins a Medicare MSA Plan with a $3,000 yearly deductible and deposits $1,500 into her account. The plan pays for all Medicare-covered services once Mrs. Chang meets the deductible. Look below to see how Mrs. Chang uses the money in her account.

Mrs. Chang has a $500 doctor's visit and uses her account to pay for this expense. Since the expense is a Medicare-covered service, the $500 is credited towards her deductible.

Account balanceDeductible
$1,500 − $500 = $1,000$3,000 − $500 = $2,500

Mrs. Chang gets an MRI that costs $1,000. She uses her account to pay for this expense. Since the expense is a Medicare-covered service, the $1,000 is credited towards her deductible.

Account balanceDeductible
$1,000 − $1,000 = $0$2,500 − $1,000 = $1,500

Mrs. Chang visits specialists and the total cost of the visits and additional tests is $1,500. She's used all the money in her account, and must now pay out-of-pocket until she reaches her deductible. Since the expense is a Medicare-covered service, the $1,500 is credited towards her deductible.

Account balanceMrs. Chang's out-of-pocket costsDeductible
$0$1,500$1,500 − $1,500 = $0 (deductible is met)

Mrs. Chang is admitted to a hospital for surgery. The cost for her hospital stay is $12,000. Since she has met her deductible, the plan pays all of her Medicare-covered Part A and Part B services for the remainder of the year.

Mrs. Chang's out-of-pocket costsPlan pays
$0$12,000
Note

These are just examples of plans.

Mr. Anderson joins a Medicare MSA Plan. On January 1, the plan deposits $1,500 into his account. The plan's yearly deductible is $3,000. The plan pays for all Medicare-covered services once Mr. Anderson meets the deductible. Look at how Mr. Anderson uses his account.

Mr. Anderson has a $500 doctor's visit and uses his account to pay for this expense. Since the expense is a Medicare-covered service, the $500 is credited towards his deductible.

Account balanceDeductible
$1,500 − $500 = $1,000$3,000 − $500 = $2,500

Mr. Anderson visits the dentist, who charges $600 for the service. He uses his account to pay for this expense. The dental service is a Qualified Medical Expense, but it's not a Medicare-covered service. He may use his account for the dental service, but the expense isn't credited toward his deductible.

Account balanceDeductible
$1,000 − $600 = $400$2,500 − $0 = $2,500

Mr. Anderson's electric bill is due. He uses the money in his account to pay the $200 bill. He's allowed to use the account to pay for this non-medical expense, but it isn't credited towards his deductible. Note: He'll also pay income tax and a 50% tax penalty on this non-medical expense.

Account balanceDeductible
$400 − $200 = $200$2,500 − $0 = $2,500

Mr. Anderson falls and goes to the emergency room. The emergency room visit and other costs related to his fall total $3,500. He uses the remaining $200 in his account and must then pay $2,300 out-of-pocket until he meets his deductible. After he meets his deductible, the plan pays the remaining cost of his emergency room visit and for all of his Medicare-covered costs for the remainder of the year.

Account balanceMr. Anderson's out-of-pocket costsDeductiblePlan pays
$200 − $200 = $0$2,300$2,500 − $2,500 = $0 (deductible is met)$1,000