If you are 65 years or older, you can count on Medicare to pay for your health care bills. However, you have to be qualified to access plans, such as a Medicare medical savings account (MSA). These plans utilize flexible savings account that can be credited every year by the government. It is important to note that Medicare can not cover all your healthcare costs.
In some cases, Medicare users need these programs to stretch their money more when it comes to pay for copays and deductibles. Contrary to popular opinion, Medicare savings accounts are not popular. This is because there are a lot of controversies about who can access them and how to use them.
In this article, we will discuss some important things to note about Medicare savings accounts, including the advantages and disadvantages of using one.
What is a Medicare Medical Savings Account?
If you possess high-deductible, private health insurance plans, Medicare MSAs are a good alternative for you. They have similar features with employer-supported health savings accounts (HSAs). However, unlike HSAs, they are a type of Medicare Advantage plan, also called Medicare Part C. You can get MSAs from private insurance organizations that work with financial institutions to provide the accounts.
In most cases, Medicare seeds the accounts of people with an MSA when a new year begins. Any money sent into your account is exempted from any tax rules. However, you must use the money in your account for qualified healthcare costs for it to be considered tax-free.
The plan covers your remaining Medicare-eligible healthcare costs for the rest of the year after you have reached your annual deductible using the MSA. You can access plans for hearing aids, dental coverage, and vision plans if you pay an extra premium. You can also use MSA to cover associated costs.
Medicare Medical Savings Accounts does not cover prescription drug coverage, also known as Medicare Part D. You can access Medicare Part D coverage alone and spend cash gotten from MSA on prescription drugs. However, deductibles will not be linked to copays on drugs.