Medicare Savings Program vs. Medicare MSA Plan: Key Differences
By Sharon Ben-Moshe · Founder & Editor
A Medicare Savings Program, usually called an MSP, is state-administered help with Medicare costs for eligible people with limited income and resources. A Medicare Medical Savings Account, or MSA, plan is a type of Medicare Advantage plan. The names sound similar, but the programs have different eligibility rules, payers, and purposes.
MSP vs. Medicare MSA: key takeaways
- An MSP may pay Medicare premiums and, for QMB, Medicare-covered cost-sharing.
- A Medicare MSA plan combines a high-deductible Medicare Advantage plan with a bank account funded by the plan.
- MSPs are administered by state Medicaid agencies; MSA plans are offered by private Medicare Advantage plans.
- Do not assume that a Medicare MSA account is an MSP benefit or that it changes MSP eligibility.
What is a Medicare Savings Program?
Medicare identifies four MSP categories: QMB, SLMB, QI, and QDWI. QMB can help pay Part A premiums when applicable, Part B premiums, and Medicare-covered deductibles, coinsurance, and copayments. SLMB and QI help pay the Part B premium, while QDWI helps pay the Part A premium in a narrower working-disabled situation. Medicare’s MSP page lists the current federal reference limits and directs applicants to their state.
What is a Medicare MSA plan?
A Medicare MSA plan is a Medicare Advantage plan with two parts: a high-deductible health plan and a medical savings account. The plan deposits money into the account for Medicare-covered health-care expenses, and the plan begins paying covered costs after the deductible is met. Medicare’s MSA plan overview explains that an MSA plan may have its own provider and coverage rules.
How are the programs paid for?
An MSP is a Medicaid eligibility category through which the state pays specified Medicare costs for a person who qualifies. An MSA plan is private Medicare Advantage coverage under Medicare rules, with a plan-funded account for the enrollee. The MSA deposit is not a state Medicaid payment and is not a substitute for applying for an MSP if you may qualify.
Which one should you choose?
They are not alternatives in the same sense. A person considering an MSA plan should compare the plan’s deductible, network and coverage details through Medicare. A person who may be eligible for help paying Medicare costs should apply for an MSP through the state. Plan choices can have major financial effects, so use free, unbiased help from a State Health Insurance Assistance Program before changing coverage.
You can begin with the MSP eligibility checker to estimate whether a state application may be worthwhile. The state decides eligibility, and Medicare plan materials control the terms of a particular MSA plan.
Frequently asked questions
Frequently Asked Questions
Is a Medicare Savings Program the same as a Medicare MSA plan?
No. A Medicare Savings Program is state-administered help paying certain Medicare costs. A Medicare Medical Savings Account plan is a type of Medicare Advantage plan with a high deductible and a plan-funded account.
Does an MSP give me a medical savings account?
No. MSP benefits are payments toward specified Medicare premiums or cost-sharing, depending on the category. They do not create a Medicare Medical Savings Account.
Who administers Medicare Savings Programs?
States administer Medicare Savings Programs through their Medicaid agencies. Medicare directs people to their state to apply.
Who offers Medicare MSA plans?
Private Medicare Advantage plans offer Medicare MSA plans. Medicare describes each MSA plan as a high-deductible plan paired with a medical savings account.
Your next steps
Check if you qualify for Medicare Savings
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