Your MSA Plan Has Ended

Question: I have the MSA from MVP. I got a letter saying that plan is no longer offered in 2018. What should I do?

Answer: The Medicare Savings Account (MSA) is a type of Medicare Advantage Plan available to those with Medicare in our state. This plan was being offered by BlueCross and BlueShield of Western New York since 2009. In 2016/17, the MSA plan was offered by MVP HealthCare under the name SmartFund MSA. This plan is NOT being offered in our region of New York State, so you must make a different insurance choice for 2018.

This MSA insurance product was a replacement for Original Medicare for those that enrolled in this plan. This product did NOT include Drug Coverage, so you needed to have additional Prescription Drug Coverage, through a Stand Alone Part D Plan.

This MSA is an entirely different kind of product than all the other Medicare Advantage Plans. This MSA Plan included an annual amount that was deposited into a Checking Account in your name, in a Mellon Bank Account. You were given a checkbook and Debit Card to use to pay your Medical Bills. You may have money left in that Mellon Bank Account, as you get to the end of 2017. This could be because you haven’t yet paid bills for the procedures that were done this year, or because you didn’t spend as much as the plan allocated to you. This ‘roll over’ money is yours to keep when this plan ends on 12-31-17. Now that the Plan is no longer available in your area, that money is still yours. The account is in YOUR name and belongs to you once it is deposited.

What you need to do is think about how you will use that ‘left over’ money. Since that MSA plan is no longer available in our part of the state, Mellon Bank will very likely begin to charge you monthly maintenance fees and maybe even some other fees. I would recommend spending this money to pay for medical expenses or closing the account all together.

It is important to remember that the IRS will consider this taxable income if you spend this money on anything but medical claims. The tax rate on this money in that situation is 50 percent, so it is NOT recommended to use it for anything but Medical bills. As you spend money paying Medical bills, you should keep your receipts and itemize how you spent that money, so that you can document what you did with it.

You can do record keeping without maintaining the bank account at Mellon Bank. When you close that account, you must simply maintain a paper trail on how you spend the money for medical expenses, NOT just Medicare related spending. You can pay for things like Hearing Aides, Dental Expenses, Chiropractor, Eye Glasses, Prescription Medication co-pays, Medical Insurance Premiums, and Medicare Part D premiums to just name a very few of the items used for IRS purposes. You can obtain a full list from the www.IRS.gov website or by calling the IRS directly. You can also reimburse yourself for spending you already did while you have this MSA as your active insurance. It is about maintaining the paper trail and proof of your spending for your IRS Tax Returns.

I do think it is significant to recommend photocopying ALL receipts. If you notice the receipts most of us receive now fade pretty quickly, particularly if left in the sun. I recommend photocopying receipts when you get them and put them in a file to be kept with your Medical billing records. That way you won’t “lose” the information on that receipt.

Now that this MSA plan is not being offered, you must make a new and different choice for your Health Insurance for 2018. Your Prescription Drug Coverage has always been separate from this plan, so you could keep that. If you do nothing, you will revert to Original Medicare for your Health and Medical coverage. Your drug plan would roll over to 2018 as long as that plan is still offered.

This Annual Open Enrollment Period (Oct. 15 to Dec. 7) is available to you to make a different choice. You also have an extended Special Enrollment Period (SEP) because your MSA plan has ended. Your SEP is extending the time you have to change from Oct. 15 all the way to Feb. 28, 2018. Now I do not recommend waiting until February, but you could sign up for a different product into 2018.

The following are several options you have during this upcoming Enrollment Period.

You could choose to stay with Original Medicare, add on a Medicare Supplement Plan (Medigap), and hold onto your Stand Alone Prescription Drug Coverage (PDP). You could keep Original Medicare, add on a Medicare Supplement Plan (Medigap) and CHANGE your Stand Alone Prescription Drug Coverage (PDP). You could also consider going to a Medicare Advantage that includes Prescription Drug Coverage. This would end your PDP plan and replace it with the Medicare Advantage Plan that includes Prescription Drug Coverage. You have more than 48 options in 2018, so be sure to take a good look at the plans available and find one that works for you and how you use Health Care and Medications.

I am disappointed that this MSA plan has ended. For the right person, this was an interesting and useful insurance product. I enjoy having different types of options for individuals to choose from. It is really about finding the insurance solution that works the best for you, your needs, your providers and your medications. Good luck!

To contact Janell Sluga, GCMC with questions or concerns, please call 720-9797 or e-mail her at janells@lutheran-jamestown.org.

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