IRS-deemed Qualified Medical Expense (QME)
Any QME listed in the current
IRS Publication 502
as deductible is eligible to be paid from your MSA custodial account. Publication 502 explains the itemized deduction for medical and dental expenses that you claim on Schedule A. It discusses what expenses you can include in figuring the deduction. Medical expenses include dental expenses, and in this publication, the term “medical expenses” is often used to refer to medical and dental expenses.
Medicare-eligible Expenses are also IRS-deemed Qualified Medical Expenses.
NOTE:
only Medicare-eligible Expenses will count toward satisfying the MSA deductible.
What Are Medical Expenses?
Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.
Medical care expenses must be primarily to alleviate or prevent a physical or mental
disability
or illness. They don’t include expenses that are merely beneficial to general health, such as vitamins or a vacation.
Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract.
Network of Healthcare Providers
This MSA plan has
no network
of healthcare providers that you are required to use. You are able to see any provider in the U.S. that is enrolled in Medicare and is accepting new patients. In addition, you will be billed at the discounted Medicare fee-for–service rates, also referred to as the “Medicare-allowed amount”.
Prescription Drug Coverage
Since MSA plans not allowed to cover prescription drugs, you will most likely opt to enroll in a “stand-alone” Part D Medicare Prescription Drug Plan. There may be dozens of plans to choose from in your area. Be sure to select a plan that is most suitable and affordable.