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Medicare Savings Account (MSA) Plans

Medicare Savings Account (MSA) Plans

Medicare is the federally run health insurance plan. There are two major types of Medicare: Original Medicare and Medicare Advantage. The former is exclusively run by the federal government while the latter is run by both the federal government and a private insurance company. There are multiple types of Medicare Advantage Plans. One type is a Medicare Savings Account (MSA). Depending on your state of health, a MSA may be right for you. To learn more, read on below.

Benefits of Medicare Advantage

Medicare Advantage is like an alternative to Original Medicare. You still have to purchase the main two parts of Original Medicare, Parts A and B. However, once enrolled, you can also look into Part C, or what is generally thought of as Medicare Advantage. While most people choose Original Medicare alone, many of the people who choose Medicare Advantage do so because it offers bonuses. These bonuses include things like gym memberships, vision, dental, and hearing insurance, transportation services to appointments, and sometimes even prescription drug coverage.

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Types of Medicare Advantage Plans

Just like any other private insurance option, there are multiple types of Medicare Advantage Plans. The five different types are:

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee-for-Service (PFFS)
  • Special Needs Plans (SNPs) 
  • Medical Savings Account (MSA) 

Here, we will discuss the MSA.

MSA Overview

A MSA is a type of insurance plan that combines a high-deductible health plan with a bank account. This means that you have a bank account you can draw from. Essentially, in a MSA, the insurer deposits money into the savings bank account. You then use this money to pay for your healthcare. After you use all of the money in the account, you have to pay out-of-pocket until you meet the deductible. The deductible is generally high. After you meet the deductible, the insurance company begins paying for benefits.