An Introduction to MSA Plans

I just heard about this Medicare plan that the insurance company puts money into the account. What is this? How does it work?

A Medical Savings Account (MSA) plan is a type of Medicare Advantage plan available in limited areas. The plan has no monthly premium and can offer benefits not covered by Medicare, such as dental and vision coverage. There is no drug coverage so the beneficiary must purchase a Part D stand-alone prescription drug plan.

There are two parts to this plan.

• A high deductible: The beneficiary must pay this deductible before the plan contributes anything. The amount of the deductible varies from plan to plan and year to year.
• A medical savings account: The beneficiary sets up an account at a bank the plan selects. Unlike health savings account (HSA) plans, the beneficiary cannot contribute to a Medicare MSA. The Medicare Advantage plan decides how much money to contribute and deposits money into the account.  

MSA plans were introduced in 2007. By 2019, there were over 6,700 enrollees. Many thought these plans would become popular because of the rise of high-deductible employer plans. In 2022, there were 11 plans but now, in 2024, there is only one and that’s in Wisconsin.