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August 24, 2009
Using a Health Savings Account While on Medicare
I received this question recently: My wife and I turn 65 this year and will sign up for Medicare. Will we still be able to use the money in our Health Savings Account?
The Answer: You sure can!
Even though you can't contribute to a Health Savings Account after you sign up for Medicare, you can keep the Health Savings Account and use the money tax-free for medical expenses. In fact, you can use the money in your Health Savings Account for anything after age 65, although you will owe taxes on withdrawals for non-medical expenses.
There are plenty of medical fees to which you can apply the money. For example, you can tap the account for Medicare deductibles and co-payments. You could also use Health Savings Account money to cover premiums for Medicare parts A, B and D (prescription-drug coverage), and to pay Medicare Advantage premiums. And you can use Health Savings Account money to help pay qualified long-term-care premiums. However, you can't use Health Savings Account money tax-free to pay Medigap premiums.
Learn more about Health Savings Accounts at HSA for America.
Posted by Wiley Long at August 24, 2009 09:15 PM