Remember, these are only examples. Plans vary and actual deposit and
deductible [glossary]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.
- Simple Example: Medicare Medical Savings Account (Msa) Plans
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Mr. Jones and Mrs. Martinez are interested in joining Medicare MSA Plans. Plans ABC and XYZ are available in their area.
PLAN ABC PLAN 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.
- Detailed Example: Medicare-Covered Expenses Count Toward The Plan Deductible In Msa Plans
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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 balance Deductible $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 balance Deductible $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 balance Mrs. Chang's out-of-pocket costs Deductible $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 costs Plan pays $0 $12,000 - Detailed Example: Non-Medicare-Covered Expenses Count Towards The Plan Deductible In Msa Plans
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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 balance Deductible $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 balance Deductible $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. He'll also pay income tax and a 50% tax penalty on this non-medical expense.
Account balance Deductible $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 balance Mr. Anderson's out-of-pocket costs Deductible Plan pays $200 − $200 = $0 $2,300 $2,500 − $2,500 = $0 (deductible is met) $1,000