Are you seeing Lasso Healthcare for the first time? Whether you've just seen it come up on Medicare's Plan Finder or you heard about this unique MSA through the grapevine, you've come to the right place.
Lasso Healthcare's Medical Savings Account (MSA) is the largest MSA on the market right now, by far. With 85% year-over-year retention, it's no wonder this unique Medicare product is taking the market by storm.
There’s a pretty common statement we’ve been hearing from agents that are already contracted to sell the Lasso Healthcare MSA: “This is the plan I’m going to choose when I’m Medicare eligible.”
There’s a reason for that, and we want to explore it with you. As an agent, you also want to know all of the MSA plan details to be prepared, so we’ve split this article up into sections.
Table of contents:
- What is an MSA?
- The MSA Deposit, Explained
- What Does the Custodial Bank, Optum Bank, Do?
- What’s Covered by the MSA?
- How Do Claims Work?
- Ideal MSA Client Profile
- The MSA vs. Medicare Supplements
- Enrollment and Disenrollment
- Appointing/Contracting with Lasso Healthcare
What is an MSA?
An MSA is an acronym for Medical Savings Account. MSAs are a Medicare Advantage product, though they're structured very differently as you'll soon see.
The Lasso Healthcare MSA plan is a $0 premium, high-deductible healthcare product underwritten by Lasso Healthcare. Just like other Medicare Advantage products, the client will still be responsible for the monthly Medicare Part B premium.
We like to explain the MSA by highlighting its four key "pillars" that will never change:
- There are no networks.
- It's $0 premium.
- There's no prescription drug plan included.
- You get an annual deposit.
MSAs have no networks
MSA plans do not have a network of providers, so members choose their health care
services and providers. Thousands of providers already accept the MSA, including
some of the largest and most renowned systems.
Providers can decide at every visit whether to accept the Plan and agree to treat members; however, members cannot be denied emergency care due to their insurance plan.
This is an excellent fit for snowbirds who like to travel frequently and have a hard time staying within a strict network.
MSAs have no premium
The MSA is also $0 premium, and that'll never change.
MSAs don't have drug coverage
There's no drug coverage included with the plan, but we actually see that as a positive, not a negative.
With typical MAPDs, the client may enjoy the health coverage, but the drug coverage wrapped up into the plan doesn't really suit them. With the MSA, they have the freedom to pick a standalone Part D plan that's tailored to their prescriptions and the pharmacy they want to go to.
While you can't use the annual deposit for the Part D premium, you can use it for copays or coinsurance at the pharmacy.
MSAs have an annual deposit
Finally, speaking of that annual deposit, an MSA always comes with an annual deposit that's put into the beneficiaries medical savings account.
For 2023, there are two plan choices (the same plan choices as 2022):
- Growth MSA: $2,000 deposit (with a $5,000 deductible)
- Growth Plus MSA: $3,000 deposit (with an $8,000 deductible)
That money comes from the government, is paid to Lasso Healthcare, and is then deposited in the policyholder’s account.
The deposit can be utilized as first-dollar coverage to fulfill the deductible, but we'll cover that in more detail shortly.
MSAs have a high deductible
MSAs do have a high deductible, which means it won't necessarily be right for everyone. We'll share some client profiles and sales scenarios later in this article, but the high deductible isn't an immediate concern for many seniors.
For 2023 deductible amounts, there are two choices:
- Growth MSA: $5,000 deductible (with a $2,000 deposit)
- Growth Plus MSA: $8,000 deductible (with a $3,000 deposit)
Lasso Healthcare tells us that only 10% of members went through their plan deductible, so there's a good chance your clients won't be exposed to that full Member Responsibility.
MSA state availability
There are more states than ever before for Lasso Healthcare MSA plans:
- District of Columbia
- New Hampshire
- New Mexico
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
In our opinion, the MSA is one of the most consumer-friendly products available in the whole Medicare Advantage space – if not the whole Medicare space.
In sum, an MSA is a high-deductible healthcare product backed up with a medical savings account utilized at a custodial bank.
The MSA Deposit, Explained
The way the MSA deposit works is very simple, but you may get some questions from clients about how those funds roll over, what happens at tax time, and what happens in the event of death.
How Do the Deposited Funds Work?
Lasso Healthcare deposits money into the MSA at the beginning of the year. The client can choose between the $2,000 deposit or the $3,000 deposit for 2023.
However, what happens if the client doesn’t use all of those funds?
Good news! It rolls over to the next year. The end-of-year account balance is never “use it or lose it.”
If you keep your Lasso Healthcare MSA, the funds will stay in your account for the next year. If you choose not to renew your MSA, those funds are still yours to keep. They are subject to the same IRS rules as when you were a part of the MSA plan.
Once your client is officially signed up for the plan, they’ll receive a welcome packet, a debit card that’s linked to their MSA bank account, and a health plan membership ID card. Let your client know that these three items might be shipped separately.
As a nice bonus from Lasso, your client can earn rewards by completing three simple activities:
- Completing a health survey
- Ordering labs and discussing the results
- Seeing their provider
These are all a part of the For Your Health incentive program, and your client can earn those rewards every single year. Directions on how to complete all of these tasks are included in the welcome packet, which will be mailed to your client when they sign up for the plan.
What Happens at Tax Time?
If your client uses any of the funds from the MSA account, they will need to file an IRS Form 8853 and 1040 at tax time.
They’ll receive a Form 1099-SA from Optum Bank reporting the account distributions by January 31. That form will report all distributions and expenditures from the account. Optum Bank will also report that information to the IRS.
What Happens If I Die?
If you die, whatever is left in your MSA will go to your beneficiary. If that happens to be your spouse, there is no tax penalty. If not, ordinary income would apply subject to IRS rules.
Custodial fees would be charged by Optum Bank, but the account could also be moved to a custodial account that the beneficiary chooses.
What Does the Custodial Bank, Optum Bank, Do?
Optum Bank is the place where the Lasso Healthcare MSA annual deposit will be housed.
Optum Bank is the market leader in HSAs, currently servicing over three million accounts and $9 billion in assets under management.
Medical Savings Accounts (MSAs) are similar to Health Savings Accounts (HSAs) that are available outside of Medicare, which makes Optum Bank a fantastic partner for the Lasso Healthcare product.
With Optum Bank, there are no fees to keep your money inside the MSA. This means you and your beneficiaries will get a monthly statement, and there will never be a negative number due to fees.
Optum Bank also provides all the tax forms the beneficiary will need to file at the end of the year regarding any withdrawals from the MSA.
Optum Bank is able to put the funds within the MSA into some interest-bearing accounts. In other words, you can earn higher interest rates than the typical savings account.
This helps augment the MSA, which can offset future claims costs. There must be a minimum of $2,000 inside the account in order to have access to the interest-accruing options.
The money deposited and any interest earned is NOT taxed as long as you apply the monies toward any QMEs, whether they’re Medicare-covered or not.
Don’t worry – all of this will be set up at the time of enrollment.
What’s Covered by the Lasso Healthcare MSA?
If you sell the Lasso Healthcare MSA to your client, they're responsible for all medical bills up to their high deductible.
Since they get a deposit they can use for medical expenses, their real risk is the difference between the deposit and the deductible – Lasso Healthcare calls this the "Member Responsibility."
*Your client would also be responsible for paying their monthly Part B premium and 100% of any non-Medicare covered Qualified Medical Expenses (QMEs), via either their MSA bank account funds or out-of-pocket, before and after they reach the plan deductible. The deposit and deductible amounts shown above are full calendar-year amounts, based on a January 1 effective date. If your client enrolls for a partial calendar year, the deposit and deductible amounts will be prorated based on the month their coverage becomes effective with Lasso Healthcare MSA.
When it comes to what's covered, here's the quick answer: after your client reaches their deductible, all Medicare Part A/B approved expenses are covered 100%.
However, before their deductible, your client has some freedom. Their deposit can cover more than just Medicare-approved expenses.
There are three categories when it comes to how your MSA deposit is spent:
- Medicare-covered expenses
- IRS Qualified Medical Expenses that are non-Medicare
- Non-qualified expenses
All Medicare A/B covered expenses will count toward the MSA deductible, and they are not taxed by the IRS. Basically, if Medicare covers an item or service, that will count toward the deductible – or eventually paid for – by the MSA.
Qualified medical expenses
For IRS Qualified Medical Expenses (QMEs) that are not covered by Medicare – like Part D prescription drugs, chiropractic services, long-term care, and hearing aids – they won’t count toward the MSA deductible, but they’re still tax-free. You can see a full list of the services and products that count as QMEs in the IRS Publication #502 for the applicable tax year.
If the MSA deposit is used for non-qualified expenses, then it does not count toward the deductible, and it’s subject to IRS taxes and penalties.
So, if you use that deposit for things like food, clothing, or house payments, those funds will be taxed as part of your income.
Three quick claims examples – what's covered?
I know all of that can be a bit confusing at first, so here are a few examples:
- Regular doctor visit: counts towards the deductible, and you can use your deposit to pay for it
- Hearing aids: does not count towards your deductible, but you can use your deposit to pay for it
- New television: does not count towards your deductible, and you'll be taxed 50% on that purchase if you use your deposit to pay for it
How much do medical services actually cost since Medicare isn't paying?
Since your client is responsible for medical expenses until they reach their deductible, many agents have asked us how much those medical services cost.
The good news is that all medical services and expenses are re-priced to the Medicare-approved amount. Your client will not pay full retail price for any medical services when they have the Lasso Healthcare MSA.
We cover this in a lot more detail here: How Much Do Medical Services Actually Cost With the Lasso MSA?, but here are few quick, real-life examples:
- A $1,174 hospital charge was re-priced to $58.48.
- A $664.44 medical bill was re-priced to $183.44.
- A $351.28 therapy bill was re-priced to $105.24.
- A $213.26 therapeutic procedures bill was re-priced to $58.17.
As you can see, basic medical items and services aren't going to be big-ticket items for your Lasso Healthcare MSA clients.
While an inpatient hospital stay is probably going to expose a policyholder to their Member Responsibility, basic medical services throughout the year probably won't.
In fact, 98% of 2020 Lasso Healthcare members had deposit funds remaining in their account at the end of the year!
How Do Claims Work?
The MSA claims process works just like other Medicare Advantage plans.
The client will visit the doctor, and the provider will then bill that visit to Lasso Healthcare. Please note that there are NO copays required under the Lasso Healthcare MSA.
The bill will then be adjusted to match Medicare-approved rates, and Lasso Healthcare will check the client’s progress towards their deductible. If the client has not met their deductible yet, they will be sent a bill. If they have, Lasso Healthcare will pay.
Then, the client will be sent their Explanation of Benefits (EOB), showing how the claim was re-priced, progress made toward the deductible, and if Lasso Healthcare paid that claim or if the client needs to pay it.
If the client is responsible, they can pay for that bill out of their own pocket or with their MSA funds. If they want to use their MSA funds, they have a debit card that they'll receive when they enroll.
Ideal MSA Client Profile
Here are 4 main considerations when thinking about the ideal client profile for the Lasso Healthcare MSA:
- The client is healthy.
- The client is able to handle the difference between the deposit and the deductible.
- The client is uninsurable for whatever reason, but still healthy.
- The client receives a stipend as a contribution towards post-65 healthcare.
This MSA will be the greatest fit for individuals who are healthy and that are financially able to handle the difference between the deposit and the deductible.
Another point to consider is that the Lasso Healthcare MSA does not have any underwriting requirements. So, if you have clients that have a quirky condition and can’t switch Medicare Supplements, this can be a fantastic solution.
For example, a client might be healthy except for osteoporosis, which is really no big deal, but they had a stress fracture in the past year. There can be nothing else wrong with that client, but they’re uninsurable. This gives that client a wonderful option.
Finally, there are many larger employers that offer a yearly stipend as a contribution towards post-65 healthcare. As long as the employer reimbursement is not specifically designed to offset the deductible, the client can have the MSA in parallel with their reimbursements.
If you want to see what this kind of presentation would look like, Luke Hockaday shared his own experience selling the Lasso Healthcare MSA to an individual who gets employer reimbursements.
As long as the client is allowed to use that money however they want to use it, it’s allowed. As the agent, please request the employer’s plan document and send that to me (Steve Spinner) to verify the details and confirm that your client can indeed get this MSA.
Beyond these notes, there are some basic eligibility requirements we need to be aware of.
The client must:
- Be Medicare-eligible
- Live in the Lasso Healthcare MSA service area
- Reside in the U.S. for 183 days or more during the year
- Not have any other coverage that would cover the MSA plan deductible (including employer benefits, TRICARE, the VA, or FEHBP)
- Not be eligible for Medicaid
- Not be receiving Medicare hospice benefits
- Not have end-stage renal disease, unless the client was enrolled with an MA plan that left Medicare and hasn’t yet joined another MA plan
The MSA vs. Medicare Supplements
Medicare Supplement agents can be leery of Medicare Advantage plans, but in all actuality, most Med Supp agents we've talked to are embracing the MSA.
It doesn't have the constraints that typical MA plans have, like network issues. In addition, it gives agents a place to put clients who can't pass underwriting.
Enrollment and Disenrollment
You can first sign up for the Lasso Healthcare MSA during the Annual Election Period (AEP) or your Initial Enrollment Period (IEP).
If you're not comfortable with the IEP, this is the 7-month window when someone is new to Medicare.
For example, they can be on a group health product until they're 70, and at 70, they can sign up for Part B. That's considered their IEP, and they'd be eligible for Lasso Healthcare.
The IEP includes the month you turn 65, three months prior to that, and three months after that.
Except for rare cases, the only time you can disenroll is during AEP. Clients can not disenroll doing the MA OEP (Jan 1-Mar 31).
It’s important to understand the timing of things here because the deposit and deductible are affected.
What’s In the Lasso Healthcare MSA Enrollment Kit?
The enrollment kit includes six items:
- Lasso Healthcare Scope of Appointment (SOA) Form
- Lasso Healthcare MSA Pre‐Enrollment Checklist
- Lasso Healthcare Summary of Benefits
- Lasso Healthcare MSA Enrollment Form
- Optum Bank Medicare Advantage MSA Authorization Form
- Lasso Healthcare Plan Overview
Just so you’re aware, the Scope of Appointment (SOA) form is the agent’s responsibility. You must keep the signed SOA for 10 years, per CMS requirements, and be able to produce it upon request by Lasso Healthcare.
You can easily download enrollment kits from the Lasso Healthcare website on the document page.
How Are Applications Submitted?
Paper applications should be faxed to 888-638-6943 as soon as possible, but never later than 48 hours from completion. Agents can also guide the client to complete the online enrollment form using his or her writing number. Just have the client go to the Enroll section.
Include the Cover Sheet, Scope of Appointment, Enrollment form and Optum Bank MSA request form.
How Do I Track Submitted Apps?
If you’re contracted with us here at New Horizons, you can call us for updates. Lasso provides us with daily updates to enrollment statuses. You can also contact Lasso Healthcare Agent Support directly at 800-918-3859.
Once your client’s coverage begins, you’ll be paid your commission before the end of that month. You can also ask us for your commission statements if needed.
Do I get full comp if my client joins mid-year?
Commissions are only pro-rated when required by the Medicare Communication and Marketing Guidelines (MCMG).
Under current MCMG guidelines, it depends on the reason the client is joining. If they’re joining the Lasso Healthcare MSA for the first time using the ICEP, you’d get full comp (12 months) with no proration.
However, if they’ve had the Lasso Healthcare MSA before and they’re re-joining, the comp would be pro-rated for only the months the member is enrolled in the plan.
Appointing/Contracting with Lasso Healthcare
Do You Need to Complete the AHIP?
Yes – in order to sell the 2023 Lasso Healthcare MSA, you’ll need to complete the 2023 AHIP.
Read more: 2023 AHIP Certification Discounts
How Do You Get Appointed With Lasso?
When you’re ready to get contracted, or if you have any additional questions or concerns, please get in touch with us here at New Horizons.
After that, you’ll receive an email with the training you’ll need to complete as well as the Lasso Healthcare certification test. Face-to-face training is not required.
After you pass the cert, you’ll receive a welcome letter with your writing number. You’ll also receive an initial supply of five enrollment kits and presentation materials.