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Medicare Advantage MSA's have not made much of a splash, however, this could change with the 2008 enrollment.
For the 2007 plan year, there were only 3 Plan Sponsors who filed an MSA and less than 3,000 enrollments nationally.
That said, MSA's have some compelling features/advantages and enrollment should be much bigger in 2008.
What it is: An MSA is simply a high deductible plan with a medical savings account attached to it. CMS set the maximum deduction at $9,500 (in 2007), but most companies set their deductibles at $2,500 to $5,000.
At the beginning of the year, the Plan Sponsor makes ONE lump sum deposit into the Enrollee's account. I'm seeing contributions ranging from $1,250 to around $2,000. This money can be used to satisfy the deductible, but also to pay for other expenses.
You can find Medicare's Guide to MSA's here:
Expenses used to pay for Medicare A & B covered expenses count toward the deductible AND are tax free. Medical Expenses (see IRS Publication for detailed list) which are not A&B covered expenses (dental, hearing aids, glasses, qualified LTCi, etc) incur no tax, however, they don't count toward the deductible. Other expenses (like groceries, utilities, etc.) would trigger a tax consequence and, likely, tax penalties as well.
Any money not used can be rolled over to the next plan year (or used tax free for non A/B Medical Expenses). After the deductible is met, the plan pays 100% of Medicare Covered Expenses.
Quick Facts:
-Monthly premium is $0, Medicare Beneficiary must still pay Part B premium.
-Cannot include a prescription benefit, must buy a stand alone PDP to cover prescription drugs, if desired.
-Medicare Beneficiary cannot deposit additional money into the account, only money deposited comes from CMS/Plan Sponsor.
-Non-network, any willing provider who accepts Medicare. Similar to PFFS, but provider could get paid AT TIME OF SERVICE via debit card.
-Can only be sold during Annual Enrollment (11/15 - 12/31). . .no OEP nor SEP sales.
-Can also be sold during Initial Coverage Election Period, deposit is pro-rated. . .but NOT the deductible, generally
-Cannot be sold to those qualifying for VA benefits, Employer Group and/or MediCAID (ie, welfare).
-Account is set up with a Trustee (like Mellon Bank). Medicare Beneficiary gets a debit card and/or checkbook to pay expenses. Small monthly trust fee applies about $4/month.
- Interest accrued in account is tax-free when used for qualifying Medical Expenses (Trustee sets rules for when/if/how much interest is paid.)
-Cannot disenroll during Open Enrollment (Jan-Mar). No leaving during the plan year (except death or leaving service area), but you can, of course, change plans during the following year's Annual Enrollment.
As an IMO, I'm aware of at least 3 MSA's which will be available for agents/brokers to sell this AEP (Nov. 15th). Feel free to contact me for more info or ask your current IMO. I only have exact plan specifics on one of the three (filed, not approved, of course) which has limited county availability, but has a $1,500 deposit and $3,000 deductible (net MOOP of $1,500, which is lower than most PFFS). Not a bad deal!
More specifics on 2008 plan filings should start leaking out late August or September.
If you have questions or comments, please post and I'll try to answer. Hope this info helps! (For Agent Use Only)
For the 2007 plan year, there were only 3 Plan Sponsors who filed an MSA and less than 3,000 enrollments nationally.
That said, MSA's have some compelling features/advantages and enrollment should be much bigger in 2008.
What it is: An MSA is simply a high deductible plan with a medical savings account attached to it. CMS set the maximum deduction at $9,500 (in 2007), but most companies set their deductibles at $2,500 to $5,000.
At the beginning of the year, the Plan Sponsor makes ONE lump sum deposit into the Enrollee's account. I'm seeing contributions ranging from $1,250 to around $2,000. This money can be used to satisfy the deductible, but also to pay for other expenses.
You can find Medicare's Guide to MSA's here:
Expenses used to pay for Medicare A & B covered expenses count toward the deductible AND are tax free. Medical Expenses (see IRS Publication for detailed list) which are not A&B covered expenses (dental, hearing aids, glasses, qualified LTCi, etc) incur no tax, however, they don't count toward the deductible. Other expenses (like groceries, utilities, etc.) would trigger a tax consequence and, likely, tax penalties as well.
Any money not used can be rolled over to the next plan year (or used tax free for non A/B Medical Expenses). After the deductible is met, the plan pays 100% of Medicare Covered Expenses.
Quick Facts:
-Monthly premium is $0, Medicare Beneficiary must still pay Part B premium.
-Cannot include a prescription benefit, must buy a stand alone PDP to cover prescription drugs, if desired.
-Medicare Beneficiary cannot deposit additional money into the account, only money deposited comes from CMS/Plan Sponsor.
-Non-network, any willing provider who accepts Medicare. Similar to PFFS, but provider could get paid AT TIME OF SERVICE via debit card.
-Can only be sold during Annual Enrollment (11/15 - 12/31). . .no OEP nor SEP sales.
-Can also be sold during Initial Coverage Election Period, deposit is pro-rated. . .but NOT the deductible, generally
-Cannot be sold to those qualifying for VA benefits, Employer Group and/or MediCAID (ie, welfare).
-Account is set up with a Trustee (like Mellon Bank). Medicare Beneficiary gets a debit card and/or checkbook to pay expenses. Small monthly trust fee applies about $4/month.
- Interest accrued in account is tax-free when used for qualifying Medical Expenses (Trustee sets rules for when/if/how much interest is paid.)
-Cannot disenroll during Open Enrollment (Jan-Mar). No leaving during the plan year (except death or leaving service area), but you can, of course, change plans during the following year's Annual Enrollment.
As an IMO, I'm aware of at least 3 MSA's which will be available for agents/brokers to sell this AEP (Nov. 15th). Feel free to contact me for more info or ask your current IMO. I only have exact plan specifics on one of the three (filed, not approved, of course) which has limited county availability, but has a $1,500 deposit and $3,000 deductible (net MOOP of $1,500, which is lower than most PFFS). Not a bad deal!
More specifics on 2008 plan filings should start leaking out late August or September.
If you have questions or comments, please post and I'll try to answer. Hope this info helps! (For Agent Use Only)