Questions about Medicare Savings Accounts
Non-profit, charity hospitals are experiencing problems with enrollees in commercial Health Savings Accounts (HSAs) who do not pay their bills. Because the hospital must continue to provide services, it is a problem. These enrollees are not spending money from their HSAs. Who is responsible for making certain that enrollees in MSAs do not follow this same path?
Do all qualified medical expenses count towards the plan deductible?
Do Part D premiums count towards an MSA’s deductible?
Do all MSA plans have 100% coverage of Part A and Part B services after the deductible is met?
May beneficiaries enroll and disenroll from an MSA during an available SEP?
Please explain contracted versus network providers.
Since the deposit is prorated for enrollees who join an MSA mid-year, what happens to the deposit if an enrollee dies early in the plan year?
How often do plans make a deposit into an MSA?
Non-profit, charity hospitals are experiencing problems with enrollees in commercial Health Savings Accounts (HSAs) who do not pay their bills. Because the hospital must continue to provide services, it is a problem. These enrollees are not spending money from their HSAs. Who is responsible for making certain that enrollees in MSAs do not follow this same path?
The provider is responsible for all payments owed to the provider by anyone with an HSA (or MSA). I spoke with Ann Manley, of the Medicare Advantage Group at the Center for Beneficiary Choices at CMS, who clarified that, while they are not seeing people refusing to pay their bills, they are keeping an eye open for the situation. Also, under a traditional HSA, any money remaining in the account after age 65 may be used for non-medical expenses without a penalty (though taxes will still be assessed). See: http://www.ustreas.gov/offices/public-affairs/hsa/faq_using.shtml#hsa13
Do all qualified medical expenses count towards the plan deductible?
The Balanced Budget Act (BBA) of 1997 authorized insurers to offer high deductible Medigap policies, which are a variant of the standardized plans. These policies, also known as Plans F and J, have an annual deductible that increases annually. The reductions in premiums from high-deductible plans are substantial. If you are interested in these plans, please note that many state consumer guides only describe them in footnotes to the corresponding regular plan.
Do Part D premiums count towards an MSA’s deductible?
The 2008 MA Plan Call letter states that health insurance premiums, including drug plan premiums, do not count as qualified medical expenses. On the other hand, Part D cost-sharing (including copayments and coinsurance) is considered a qualified medical expense, but because these costs are not Part A or B services, they costs are not countable. Page 195 of the Call Letter.
Do all MSA plans have 100% coverage of Part A and Part B services after the deductible is met?
Yes, it is a requirement for MSA plans, unlike other Health Savings Accounts, which may charge some cost-sharing. Section 40.4 of MMCM Chapter 4.
May beneficiaries enroll and disenroll from an MSA during an available SEP?
Enrollees may enroll in an MSA only during their IEP or during the yearly AEP. But, an MSA enrollee may disenroll from an MSA during a SEP or during the AEP. Section 30.7 of MMCM Chapter 2.
Please explain contracted versus network providers.
According to Ann Manley, at CMS, contracted and network providers are the same thing. At this point, no MSAs have a network (or contracts) of providers. In the future, some MSAs may offer a network to enrollees, meaning that cost-sharing requirements at the network providers may be less expensive than other non-network Medicare providers. Even with network MSAs, however, no MSA may limit an enrollee’s right to see any Medicare provider he chooses, although the costs may be different.
Since the deposit is prorated for enrollees who join an MSA mid-year, what happens to the deposit if an enrollee dies early in the plan year?
If an enrollee has a $1200 deposit each year and dies in March, his estate will be assessed a prorated amount for each month he is no longer enrolled in the plan. Since end-of-life costs are typically high, it is very likely the deposit will be spent by this point; the estate would be charged $900 (for the 9 months no longer enrolled in the plan). Page 222 of the Call Letter.
How often do plans make a deposit into an MSA?
All MSA plans offered in 2008 make a one-time yearly deposit into the savings account on January 1st of the plan year. This information may be found on the MSA Fact Sheet at: http://www.cms.hhs.gov/MSA/Downloads/MSAFactSheet-3-13-08.pdf
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