Medicare Medical Savings Account (MSA) Plans

What's an MSA?

An MSA is a type of consumer-directed Medicare Advantage Plan (Part C) . These plans are similar to Health Savings Account (HSA) Plans like you’d get from an employer or the Marketplace. With MSA Plans, you can choose your health care services and providers (these plans usually don’t have a network of doctors, other health care providers, or hospitals).

Medicare MSA Plans have 2 parts:

MSAs combine a high-deductible insurance plan with a medical savings account to pay for your health care costs. You're responsible for handling the money in your account, including deciding whether to pay for health care services using your account funds or other funds you have.

1. High-deductible health plan: This is a special type of Medicare Advantage Plan. This type of plan only starts to cover your costs once you meet a high yearly  deductible , which varies by plan. 

2. Medical savings account (MSA): This is a special type of savings account. Medicare gives the plan an amount of money each year for your health care expenses. This amount is based on your plan. The plan deposits money into your MSA account once at the beginning of each calendar year. Or, if you become entitled to Medicare in the middle of the year and join a Medicare MSA Plan at that time, the plan will deposit the money into your account the first month your coverage starts.

You can use this money to pay your Medicare-covered costs before you meet the plan’s deductible. You can access the money using a checking account or special debit or credit card your bank gives you. Check with your plan for details. The yearly deposit and yearly deductible are pro-rated based on when your enrollment begins. MSAs may also pay for some qualified medical expenses.

Explore examples of a Medicare Savings Account Plans.

What should I consider when choosing an MSA Plan?

Consider asking these questions.

Find out if MSA Plans are available in your area. 

How do I join an MSA Plan?

Contact the MSA Plan you want to join for enrollment information. The plan will tell you how to set up your account with the bank the plan chooses. You must set up an account before your enrollment can be processed. You’ll get a letter from the plan telling you when your coverage begins.

Who can't join an MSA Plan? 

You can't join an MSA Plan if any of these apply to you:

  • You have health coverage that would cover the Medicare MSA Plan deductible. This includes benefits under employer or union retiree plans.
  • You joined another Medicare Advantage Plan.
  • You get benefits from the U.S. Department of Defense (TRICARE) or the U.S. Department of Veterans Affairs.
  • You're a retired Federal government employee and part of the Federal Health Benefits Program (FEHBP).
  • You're eligible for Medicaid.
  • You're currently getting hospice care.
  • You live outside the U.S. more than 183 (total) days a year.

How do I leave an MSA Plan?

If you choose an MSA Plan then change your mind, you can cancel your enrollment by December 15 of the same year. You still only have until December 7 (during the Open Enrollment Period) to join another health or drug plan. After December 7 and up to December 15, you can only return to Original Medicare.

If you leave the MSA Plan before the end of the year, no more money will be added to your account. You’ll need to pay part of the most recent yearly deposit (based on the number of months left in the current calendar year) back to Medicare.

When can my Medicare MSA Plan cancel my enrollment? 

Questions you may have about MSAs: 

Question: Answer:
Do these plans charge a monthly premium ?No, but you must continue to pay your monthly  Part B (Medical Insurance) premium.
Do these plans offer Medicare drug coverage (Part D) ?No. If you join a Medicare MSA Plan and want Medicare drug coverage, you'll have to join a separate Medicare drug plan. Find drug plans in your area.
Can I use any doctor or hospital that accepts Medicare for covered services?Yes. MSA Plans generally don't have a network of health care providers. You can get covered services from any Medicare provider in the U.S. or U.S. territories.
Do I need to choose a primary care doctor ?No. 
Do I have to get a referral to see a specialist?No.
What else do I need to know?
  • MSA Plans cover the Medicare services that all Medicare Advantage Plans must coverSome MSA plans also cover extra benefits like dental, vision, and hearing services. You may pay a premium for this extra coverage. Check with the plan you’re interested in for information on what extra benefits they offer, if any.
  • Your plan can’t charge more than Original Medicare for certain services like chemotherapy, dialysis, and skilled nursing facility care.
  • If your plan gives you prior approval for a treatment, the approval must be valid for as long as the treatment’s medically necessary. Also, your plan can’t ask you to get additional approvals for that treatment. If you’re currently getting treatment and you switch to a new plan, you’ll have at least 90 days before the new plan can ask you to get a new prior approval for your ongoing treatment.
  • During the time you're paying out of pocket for services before the deductible is met, doctors and other providers can't charge you more than the Medicare-approved amount.
  • If you use all of the money in your account and you have additional health care costs, you'll have to pay for your Medicare-covered services out of pocket until you reach your plan's deductible.
  • Money left in your account at the end of the year stays there, and may be used for health care costs in future years.
  • Learn how MSA Plans work with other coverage.

Can my surviving spouse or another beneficiary use money left in my account?

Any funds in your account that were deposited before the current calendar year are part of your estate and should be counted as gross income on your final tax return. Part of the most recent deposit (based on the number of months left in the current calendar year) will have to be paid back to Medicare.

If you name a beneficiary for your account who isn’t your spouse, the money in it after your death is counted toward that person's gross income when they file that year’s income tax return.