June 25

Medicare Savings Account (MSA)

It's that time of the year where AHIP has just opened up and a lot of you are starting to think about 2022.  You should start to make a game plan for yourself, for your agency to determine how you want to take care of yourselves and your clients.

I want to come to you today because we've seen some things that appear interesting this year. One of those being that there are going to be more options for individuals as far as Medicare savings accounts go.

Have you, as a business owner, as a partner of ours, really considered Medicare savings accounts in the past?

I know that in some areas there are no Medicare savings accounts. In other areas, they've been very limited to maybe just one carrier.

I have a sneaky suspicion that there may be some expansions going on for 2022 in the MSA markets. For that reason, I think this could be a good time to investigate any way as an agent into the Medicare Savings Account markets.

Get ahead of the competition by entering the Medicare Savings Account market

I know that for some agents that I've talked to, I seek advice from agents about what's going on in their markets and what they see. There's getting to be so much competition in many markets that it can be overwhelming to the agent as well as the consumer.

The Medicare savings accounts could be a really good option for some individuals. However, they might not be for everybody because it is a complex Medicare Advantage product. 

Zero Premium

It is totally unique in that with a Medicare savings account, there are no extra benefits. Dental and vision and hearing are not included into the core product. There's no premium, which again, statistics tell us that about 60 percent of people around the country like the zero premium. There's no prescription drug benefits that are built into it, so they will have to purchase a separate drug plan. The plan pays absolutely nothing on preventive care, unlike traditional Medicare Advantage plans.

With a Medicare savings account, the private company, whoever that may be, will make a deposit into a special health savings account for the Medicare beneficiary. At that time, the Medicare system, the original Medicare system, is hands off.

Everything will flow through that private company, just like a Medicare Advantage plan does. However, that plan is not going to pay any bills at all. Preventive care, primary care, etc. are not going to be paid until their deductible is satisfied.

Here's an example

For example, let's say that said company puts a $1,000 lump sum into a health savings account. Now, this is a Medicare savings account, but it's still going to be separated for health care expenses. This is so that $1,000 is placed into the account on January 1st. At that point, the consumer is responsible for all medical bills until, let's say, $4,000 has been met and they call that their deductible.

So the plan has a $4,000 deductible. If they put a thousand dollars into the account, the insured can then spend that $1,000 first, then they're responsible for the next $3,000. At that point, the plan picks up and pays one hundred percent. This gives a $3,000 maximum out of pocket if all of those expenses are used for medically approved expenses.

The consumer can actually take that $1,000 that was deposited in their account the first of the year. They can use it for dental, for vision, for hearing.

However, those do not count towards the deductible. Only Medicare approved medical expenses will count towards that. If they do use it for Medicare approved medical spending, their MOOP is only $3,000, which makes it a very competitive product. It also

will allow the consumer to be able to select their own drug plan. They can customize it unlike what most Medicare Advantage plans offer.

Your client may have a Medicare supplement plan and a supplement plan they've liked, but the premiums are no longer affordable. If their health is such that they can't go through underwriting, then a Medicare savings account may be the solution. It's a good product for that individual because they've already had a drug plan. They're accustomed to paying the premium for standalone drug plan, but with this plan here there are zero premiums.

Any doctor, Any Hospital, Anywhere

Another nice thing about the Medicare savings accounts is that there is no network. The insurer can go to any doctor, any hospital in the country if it's a Medicare approved facility. Their maximum risk is $3,000 with this plan.

They can keep their money in their back pocket, save the premium they've been paying on that expensive supplement plan. On the other hand, they might save no matter what happens, because if they reach $3,000, they would be capped.

Now, that's just an example. I will tell you that there are some plans that are going to be around in 2022 that are going to look similar. There are probably going to be some that may even be a little better than the example I gave. Nonetheless, I am really excited about the Medicare savings account.

Don't kick the Medicare Savings Account plans to the curb

When you prepare for this annual enrollment period, just be sure that you don't kick the MSA plans to the curb. Make sure they have a place on the table with you.

At least consider them when you see the information coming out, because we're dealing with a more sophisticated client than we've ever dealt with in the past. They're coming from HSA accounts. They're very healthy. Individuals are living longer. Those supplements are getting more expensive. All those types of people will fit into the category that could potentially consider a Medicare savings account.

If you have any questions, don't hesitate to give us a call at the office at 888-622-9122. We look forward to your calls. We enjoy your partnerships and we enjoy the friendships. As always, I wish you the best.


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