b. Medicare Medical Savings Account plans (MSAs)

A Medical Savings Account (MSA) is a type of MA plan that combines a high-deductible health plan and a tax advantaged personal savings account set up to fund medical costs not covered by the plan.

MSA plan members will receive an annual deposit into an interest-bearing account from CMS to help them cover their health care costs. Members will use the money in their MSAs to pay for their health care before the high deductible is reached. Once the deductible is met, the MA organization offering the MSA plan will be responsible for payment of 100 percent of the expenses related to covered services. When the money in the account is used to cover “qualified medical expenses” under IRS rules, it is not taxed. MSA plans are statutorily restricted from covering Part D drugs, but MSA enrollees can join a stand-alone prescription drug plan (PDP).

Depending on the MSA that the beneficiary chooses, the individual may be able to go to any doctor or hospital, or the individual may be limited to a network of providers.