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Medicare Advantage Medical Savings Accounts (MSAs)

Discover the benefits of an MSA and how it works.

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Eligibility 

A Medicare Advantage MSA Plan has two parts.

  1. A high-deductible health plan: You must be enrolled in a qualifying high-deductible Medicare Plan.
  2. Medicare Advantage Medical Savings Account (MSA): You must open an MSA through your health plan provider. Your provider will then open your account with Optum Bank, Member FDIC. Your health plan provider will then deposit money into your account.

Who can get an MSA? Most people with Part A and Part B can join a Medicare Advantage MSA Plan.  However, you cannot join if you:

  • Are eligible for Medicaid
  • Currently receive hospice care
  • Live outside of the U.S. more than 183 days per year
  • Have TRICARE or Department of Veterans Affairs benefits
  • Have health coverage that would cover the Medicare Advantage MSA Plan deductible, including benefits from an employer or union retiree plan
  • Are a retired employee of the Federal government and are in the federal employee health benefits program (FEHBP)
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How it works

  1. Join: Enroll in a qualifying high-deductible Medicare Advantage MSA Plan.
  2. Set up your MSA: Next, you’ll select your health plan provider and the provider will open your account with Optum Bank®.
  3. Get your money: Medicare will deposit a certain amount of money each year for your health care.
  4. Use: Once money is deposited, you can use it to pay for your qualified medical expenses, including costs not covered by Medicare. Money in your MSA cannot be used for qualified medical expenses of any other person, including a spouse.
  5. Pay your deductible, if you use all of your MSA funds, then you’ll pay out-of-pocket until you reach your deductible. After reaching your deductible, your plan then pays Medicare-covered services.

Guide to Medicare Advantage Medical Savings Accounts (MSAs)

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Tax benefits

  • Qualified medical expenses: Use MSA funds to pay for your qualified medical expenses, like doctor’s visits.
  • Tax-free money: Your MSA money isn’t taxable as long as it’s used for your qualified medical expenses.
  • Tax-free interest. Interest earned on MSA money isn’t taxable if it’s used for your qualified medical expenses.