Geisinger has announced that they will have an MSA (Medicare Savings Account) plan option available in NJ for 2014. For those that understand how an MSA plan works, this will be one of the best options available in NJ for 2014.
MSA plans are essentially a high deductible plan that covers members 100% after the deductible has been met. The insurance company sets up an MSA account and then fund it with money that the plan member would use for out of pocket expenditures. Geisinger will be funding the NJ MSA plan with $1,500 of a $3,000 deductible plan.
MSA accounts are personal accounts owned by the plan member. Once the money goes into the account it is owned by the member. Any unused funds left in the account would roll over to the next year. Additional moneys can be contributed to the MSA every year. Even if the member decides not to use an MSA plan the following year, they still keep the MSA account and the funds in it.
The Geisinger plan will have a $3,000 deductible. The first $1,500 of cost will be covered by the money funded into the MSA by the insurance company. If the member uses more than $1,500, they will need to fund the remaining $1,500 out of their pocket. They will then be covered at 100% after they have spend $1,500.
There is no premium for this plan ($0 monthly premium) and it does force the member to use a network. Rx coverage would need to be purchased separately but this plan is the only way to be covered 100% after spending only $1,500 for the year.
Some people will say, “I can buy a plan F supplement and have all medical expenses covered”. This is true but you need to factor in the monthly premium of the Medicare Supplement plan. The average Plan F supplement in NJ costs about $170 a month which is $2,040 for the year. It guarantees the member will pay more than they would have paid on the MSA plan.