On Medicare? Find Out if a Medical Savings Account Is Right for You
Managing healthcare costs is always a challenge, and it only gets harder as you grow older. The impact of age makes it harder for people to stay healthy, but for those older Americans who are on Medicare and have succeeded in keeping themselves in good shape from a health standpoint, one little-known option can give you an advantage in managing your healthcare costs. Medicare Medical Savings Accounts, or MSAs, offer many of the same benefits that Health Savings Accounts give younger people during their careers.
Medicare MSAs combine two key components. The first is a Medicare Advantage plan that is specifically tailored for the program, offering high deductibles that require you to retain financial responsibility for a substantial portion of your initial healthcare costs each year. The other component is the medical savings account, into which your Medicare MSA plan will make deposits to help you cover the healthcare costs you incur.
From a practical standpoint, the steps you'll follow depend on which provider you choose. Medicare Advantage plans are offered by private insurance companies, and each company has its own way of setting up medical savings accounts with approved financial institutions. Medicare pays your Medicare Advantage provider a fixed amount of money to cover your healthcare, and the amount that the plan receives in turn helps determine how much of it ends up going into your MSA.
Source: Fool.com
