Another HSA Contribution & Medicare Question

[RichardC612311]

I'm sure this has been posted before but I['m having difficulty finding the applicable reply. I'm 64 (will be 65 in 6mos) and my wife hits 65 this month. We have had a High Deductible Health Insurance Plan for many years and have contributed to an HSA each year. This is an individual plan thru the marketplace as my employer does not offer health insurance. I have already contributed the max for 2023. I would sure appreciate some help in understanding some of the implications.

1.  Will there be a tax implication since I already contributed the max for tax year 2023? If there is, how in the world do you figure it out when she will roll off the plan ion April and I will roll off in Sept. 

2.  I'm assuming I can still keep the funds in the HSA but what can I use them for? Lets say I go Traditional Medicare (Part A included automatically) and pay for Part B, a Part D drug plan and also a Medigap supplement to cover all of the deductibles and co-pays. What does that leave that I can use the HSA funds for? Can they be used to pay for Medigap for example? If not, I've got a chuck of change in there will little to spend it on except OTC medication/medical stuff.

Not sure if this is the right forum but I've seen so many helpful replies I thought I'd give it a shot. Thanks!

[dantheman63]

I have been contributing to a HSA for 3 years and hope to continue for another few years before Medicare.  What I can contribute in that time seems to be dwarfed by what I am told my future medical costs will be, and the government promises fewer taxes.  If I use it all, I save a lot.  If I don't because my health is so good, my heirs will benefit because of my good health, so I win either way.

[GailL1]

AARP - HSA and Medicare

[Tempest332]

I just did mine, there appears to be a 6% tax for contributing over your allowed amount which still includes your employer contribution.  You have an additional $1000 "catch up" you can contribute  if over 55.... I'm basing this on a single person though.  How to report this is beyond me.

Believe you can use your HSA to pay for your new health insurance premiums along with any other health care expenses,  so your gap insurance would be covered.  Remember too, most HSA plans may be now charging you hefty "monthly service fees" being outside of your Employer... going, going... gone!   

[GailL1]

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@Tempest332 wrote:

Believe you can use your HSA to pay for your new health insurance premiums along with any other health care expenses,  so your gap insurance would be covered.  

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Medicare nor the IRS consider MediGAP (supplemental) as a medical expense or insurance - it is only GAP coverage - so you cannot use HSA monies to pay for your MediGAP (supplemental).

AARP HSA Savings and Medicare

[DirkB349973]

There is a lot of good, related info on this page.

https://www.aarp.org/health/medicare-qa-tool/health-savings-account/