Medicare and Health Savings Accounts (HSA)

Do you have a Health Savings Account (HSA) & Medicare Part A and/or B?

As you navigate the world of Medicare, it’s crucial to have a clear understanding of how various aspects of your healthcare coverage work together. One component that often raises questions is the interaction between Medicare and Health Savings Accounts (HSAs).  When I meet people who have had High Deductible Health Insurance Plans in the past and have contributed money to a tax-free Health Savings Account (HSA) over the years I often get asked how that works with Medicare.  Here are some of the most common questions I get asked.

Medicare Eligibility and HSAs

Once you enroll in Medicare Part A or Part B, typically at age 65, you are no longer allowed to contribute to your HSA. However, you can continue to withdraw funds from your existing HSA to pay for qualified medical expenses, including Medicare premiums, deductibles, copayments, and certain prescription drugs.

Medicare Part A and HSAs:

Medicare Part A is typically provided at no cost to most individuals. However, if you choose to delay enrolling in Part A while contributing to an HSA, it’s essential to cease contributions six months before your Medicare coverage begins to avoid potential tax penalties.

Approved HSA Expenses Specific To Medicare

You CAN use your HSA for any qualified medical expenses approved by the IRS, including:

  • Premiums paid to Medicare (i.e. Part B, Part B IRMAA, Part D IRMAA)
  • Premiums paid to an insurance carrier for Stand-Alone Part D Prescription Drug Plans
  • Premiums paid to an insurance carrier for a Medicare Advantage Plan (Part C)
  • Medical copays, coinsurance, deductibles
  • Prescription drug copays
  • Dental, vision, hearing costs

You CANNOT use your HSA to pay your:

  • Premiums paid to an insurance carrier for a Medicare Supplement (Medigap) plan

Understanding the interaction between Medicare and Health Savings Accounts (HSAs) is crucial for making informed decisions about your healthcare and financial well-being. While Medicare eligibility restricts HSA contributions, HSAs can still be a valuable tool for covering medical expenses during your retirement. Remember to consult with your financial advisor or tax professional to explore the best strategies for optimizing your healthcare expenses and preserving your savings. With this knowledge, you can confidently navigate the complexities of Medicare and HSAs, ensuring your healthcare needs are met while maintaining financial stability.

Still have questions?

If you have a question about this topic or another, call 207-370-0143 or use the button below to send an e-mail. I’m always happy to help!

Todd Reagin Maine Medicare Insurance Agent Local Agent help with costs Medicare Advantage Medicare supplement costs compare prices in Maine

Certainly this website does not cover everything related to HSAs and Medicare so if you would like to talk about this more of have additional questions about your HSA or another topic, you can reach me at 207-370-0143 or use my simple form on the CONTACT ME page of this site to send an email message.

The best part about working with me is that my help is free.  I do not charge anyone anything to discuss your options or to review the plans that are available.  I am paid by the insurance companies in the form of a commission if you enroll in a plan, just like your car insurance or home owners insurance agent – and I will work just as hard to help you find the best plans to compare!

You will not pay any more than anyone else and you are under no obligation whatsoever to enroll in any plans if you meet with me.  My goal is to help you and I have found great joy in being able to offer my services to people who need my help.