How an MSA works
A Medicare Medical Savings Account plan has two parts working together. First, a high deductible health plan: you pay for your Medicare covered care yourself until you reach the deductible, and after that the plan pays in full. Second, a savings account: each year the plan deposits money into an account you control, and you use it toward that deductible. Money you do not spend stays yours and rolls over to next year.
The trade to understand
In a healthy year, an MSA can feel brilliant: little care needed, the deposit rolls over, and your account grows. In a hard year you pay the full gap between the deposit and the deductible before the plan takes over. It rewards people who can absorb a bad year without hardship.
Who an MSA suits
Comfortable self managers: people in good health, with savings behind them, who want maximum provider freedom and like the idea of being rewarded for low usage. If predictable copays help you sleep, an HMO, PPO or a Supplement will suit you better.
