Finally get to cover medical insurance premiums with my HSA.

[audreyh1]

Wow, banner day for me!

I start Medicare today, and finally instead of expensive individual insurance premiums, my costs and deductibles drop considerably.* Also my Part B and Part D premiums are HSA eligible. And I’ve been contributing the max to my HSA account every month.

Now, with no more cash flow going into my HSA account, no more individual insurance coming out of my bank account, and the HSA account covering the premiums (except for Medigap) that’s quite a cash flow reversal! I can probably drop what I send to checking every month.

Our plan was always to use our HSA funds to cover Medicare premiums and draw down the accounts. We pay CMS Medicare directly from the HSA accounts. I think I ended up with quite a bit more in my HSA account than expected. I got to fund mine 4.5 years longer than DH did. Once SS takes over paying the Medicare premiums we’ll simply reimburse from our HSAs.

*I was never eligible for discounted ACA premiums.

 

[bada bing]

I started Medicare 9 months ago and have similar situation with HSA balance. My choice has been to leave the money in the HSA for now. You can bank the tax credit for medical expenses and use it whenever. My judgement was that it's a little better to keep the money under the tax deferred HSA umbrella than to have it in taxable brokerage. I just crossed $100K balance in my HSA and I have ~$30K in banked eligible expenses so far. The money is fungible but the tax details aren't. YMMV of course.

There are future potential expenses I may experience that will wipe out the tax liability for me. A big potential one is the partial eligibility of CCRC entrance fees and monthly rent. Dental expenses are another one. I spend ~$2000 per year now and have no issues, just maintenance. I don't worry too much about getting tax free access to all the money in my HSA, it seems almost inevitable.

 

[audreyh1]

We always planned to spend down because you or your spouse have to use it up at some point and I’d be happy to eventually get rid of those accounts and the associated tax paperwork. We chose Medicare premiums because we could pay directly via billpay and they are super easy to document. We just keep a record each year showing the payment history. And they matched our expenses in the next several years, although now a bit longer than I had planned.

Of course you can always accumulate the records and withdraw later.

Future potential medical expenses and tax deductions - we expect to use our IRAs for those.

 

[Koolau]

MC is a really nice "surprise" in many ways. Too bad about IRMAA, but I guess nothing is perfect. Also, IRMAA is a First World problem.

So glad it's w*rking out for you, audreyh1!

 

[audreyh1]

Yeah, it’s really a battle at times to stay in that first IRMAA level and don’t always succeed, but like you say first world problem!

It’s funny how way back many years ago with some of the new tax things I thought, no problem we’ll be able to stay under $X income. Well portfolio growth happened! (Knocking on wood!)

 

[Midpack]

It took me 8 years to spend off what I accumulated in my HSA. It was very nice while it lasted.

And I agree Medicare with supplemental has been a real bargain for DW and I compared to before we both turned 65, though I know it will probably become pricier as we age and have more health issues.

 

[Exchme]

The mathematically optimum time to cash in is probably in the year after your death. The reason being keeping the money sheltered in the HSA avoids tax drag.

But speaking of drags, it's no fun keeping the receipts and keeping them organized. We have some that were printed on thermal paper that are no longer readable, we didn't keep things we should have, credit card records sometimes aren't clear as to what the expense was and may not go back past a few years, etc. There are also risks that, thankfully, haven't come to pass, like fires or floods that could destroy physical records.

To get caught up as best we can, we (well, mostly DW) resurrected records by having the pharmacy print out what they have, organized the paper receipts we have, downloaded credit card receipts, downloaded receipts from Amazon (you can spot vitamins, medical devices, etc.), compared records to eliminate duplicate items, straightened out records where the doctors collected too much at first and sent refunds later, built a spreadsheet totaling everything up, scanned and uploaded copies of everything to cloud storage. We found $57K worth of records and know that there were additional things that we just didn't do a good job tracking.

Keeping up will get increasingly difficult as we age, so DW is throwing up her hands and wants us cash in the accumulated receipts. I'm inclined to agree.

 

[audreyh1]

Yeah, just get it done. Practicality argues sooner better than later. It’s really a record keeping hassle and will only get harder as we age.

 

[G-Man]

Wow, banner day for me!

I start Medicare today, and finally instead of expensive individual insurance premiums, my costs and deductibles drop considerably.* Also my Part B and Part D premiums are HSA eligible. And I’ve been contributing the max to my HSA account every month.

Now, with no more cash flow going into my HSA account, no more individual insurance coming out of my bank account, and the HSA account covering the premiums (except for Medigap) that’s quite a cash flow reversal! I can probably drop what I send to checking every month.

Our plan was always to use our HSA funds to cover Medicare premiums and draw down the accounts. We pay CMS Medicare directly from the HSA accounts. I think I ended up with quite a bit more in my HSA account than expected. I got to fund mine 4.5 years longer than DH did. Once SS takes over paying the Medicare premiums we’ll simply reimburse from our HSAs.

*I was never eligible for discounted ACA premiums.

Did you use the folks at Boomer Benefits to help you choose the best Part B, Part D, Vision, Dental, and Medigap plan? Please advise

 

[jebmke]

I used Medicare along with dental work and cataract surgery to flush mine years ago. Wanted to empty it quickly so it didn't hang around for someone to figure out later. We discovered a small unused one in my wife's name this year so I flushed more years of Medicare premiums. $12.5K of found money.

 

[audreyh1]

Did you use the folks at Boomer Benefits to help you choose the best Part B, Part D, Vision, Dental, and Medigap plan? Please advise

No I did not. I avoided Boomer Benefits. We used them for DH 4.5 years ago and weren’t comfortable with the experience. They pushed plans we didn’t want to use (one of the many Mutual of Omaha companies) and grudgingly signed us up for what we did want. So I saw no point in doing that again. I signed up directly for AARP UHC Medigap and via Medicare.gov for Part D. We self-pay for vision and dental.

 

[G-Man]

No I did not. I avoided Boomer Benefits. We used them for DH 4.5 years ago and weren’t comfortable with the experience. They pushed plans we didn’t want to use (one of the Mutual of Omaha companies) and grudgingly signed us up for what we did want. So I saw no point in doing that again. I signed up directly for AARP UHC Medigap and via Medicare.gov for Part D. We self-pay for vision and dental.

Good to know. My wife is 4 years away from Medicare. Still not too early to start planning, I guess. We are both blessed to have a company sponsored HRA to help with Medicare and Medigap premiums and I have an HSA as well.

 

[G-Man]

No I did not. I avoided Boomer Benefits. We used them for DH 4.5 years ago and weren’t comfortable with the experience. They pushed plans we didn’t want to use (one of the many Mutual of Omaha companies) and grudgingly signed us up for what we did want. So I saw no point in doing that again. I signed up directly for AARP UHC Medigap and via Medicare.gov for Part D. We self-pay for vision and dental.

Seems like a lot of folks on this forum like AARP UHC Medigap plan. Is that a F or G plan?

 

[EastWest Gal]

Wow, banner day for me!

I start Medicare today, and finally instead of expensive individual insurance premiums, my costs and deductibles drop considerably.* Also my Part B and Part D premiums are HSA eligible. And I’ve been contributing the max to my HSA account every month.

Now, with no more cash flow going into my HSA account, no more individual insurance coming out of my bank account, and the HSA account covering the premiums (except for Medigap) that’s quite a cash flow reversal! I can probably drop what I send to checking every month.

Our plan was always to use our HSA funds to cover Medicare premiums and draw down the accounts. We pay CMS Medicare directly from the HSA accounts. I think I ended up with quite a bit more in my HSA account than expected. I got to fund mine 4.5 years longer than DH did. Once SS takes over paying the Medicare premiums we’ll simply reimburse from our HSAs.

*I was never eligible for discounted ACA premiums.

Mine happened a month ago. Also AARP through UHC.

Don't forget gym memberships, if you signed up for a plan that includes that benefit (it costs one dollar more). I changed my LA Fitness membership to Renew Active, nationwide. My subscription for one club was $39. Now I pay nothing. I prefer the weight machines at Planet Fitness, which is much closer to home. Regular membership at one club would be $0, but the black card which is nationwide and includes the hydromassage tables, massage chairs and red light therapy is $15. Signed up for that too. You can have up to three memberships. You have to get a code from UHC-call the number on your card. You use that code to sign up at the gyms. It was easy.

 

[walkinwood]

I have a year before I go on Medicare and plan to pay Part B & D premiums from the HSA at Fidelity.

Do your premiums get withdrawn directly from your HSA? Was it easy to set up?

Our premiums may not go down much since we've been able to get some subsidy due to the elimination of the subsidy cliff till 2025, but our annual spend should decrease due to the low deductible. Unfortunately, currently most of our medical expenses are optical & dental.

 

[audreyh1]

Seems like a lot of folks on this forum like AARP UHC Medigap plan. Is that a F or G plan?

They offer a few letters. I chose G. N is also popular. F is no longer available to 65 and under.

 

[audreyh1]

I have a year before I go on Medicare and plan to pay Part B & D premiums from the HSA at Fidelity.

Do your premiums get withdrawn directly from your HSA? Was it easy to set up?

Our premiums may not go down much since we've been able to get some subsidy due to the elimination of the subsidy cliff till 2025, but our annual spend should decrease due to the low deductible. Unfortunately, currently most of our medical expenses are optical & dental.

DH set up CMS Medicare for Billpay in his HSA account. Medicare.gov tells you how to pay directly from your bank and that was straightforward. He’s pushing the payments monthly rather than having them withdrawn by Medicare. We pay monthly due to IRMAA. Every December (or late November) when he gets the new rates for the following year he schedules a year’s worth of payments.

I will be doing the same thing as it has been working well.

 

[audreyh1]

Mine happened a month ago. Also AARP through UHC.

Don't forget gym memberships, if you signed up for a plan that includes that benefit (it costs one dollar more). I changed my LA Fitness membership to Renew Active, nationwide. My subscription for one club was $39. Now I pay nothing. I prefer the weight machines at Planet Fitness, which is much closer to home. Regular membership at one club would be $0, but the black card which is nationwide and includes the hydromassage tables, massage chairs and red light therapy is $15. Signed up for that too. You can have up to three memberships. You have to get a code from UHC-call the number on your card. You use that code to sign up at the gyms. It was easy.

I don’t have the Plan G with gym benefits. I actually don’t care to use a public gym. We have a good strength training set up at home. And if I want something a little different the neighborhood has a small fitness center that I can use. I occasionally use it during the summer when I can have it to myself as few snowbirds are here.

I think the rates and age-related discount schedule were quite different for my state if you selected the plan with gym membership benefits.

 

[EastWest Gal]

I have a year before I go on Medicare and plan to pay Part B & D premiums from the HSA at Fidelity.

Do your premiums get withdrawn directly from your HSA? Was it easy to set up?

Our premiums may not go down much since we've been able to get some subsidy due to the elimination of the subsidy cliff till 2025, but our annual spend should decrease due to the low deductible. Unfortunately, currently most of our medical expenses are optical & dental.

I could not get premiums withdrawn directly from my HSA, but from our regular checking account. But I can arrange a monthly reimbursement from my HSA account into our checking account for the same amount.

 

[audreyh1]

I could not get premiums withdrawn directly from my HSA, but from our regular checking account. But I can arrange a monthly reimbursement from my HSA account into our checking account for the same amount.

I didn’t want premiums drawn directly from my HSA because I didn’t want to deal with transition errors when SS starts deducting the Medicare payments. It’s a pain returning funds to an HSA.

With Fidelity HSA billpay to CMS Medicare works very well. We schedule a year’s worth at a time.