Wife’s Medicare bill we received is $845.00

[Michael]

Speedy wrote:
[quote=Diana]
Speedy,

I have an HSA through work, and I’m not yet old enough for Medicare. When you say that when you have Medicare, do you mean when you get old enough (I’m 61 now) or when you apply for and get approved for Medicare? I’ve been actively trying to ignore the getting older part …

I’ve been maximizing it every year, just because.

Diana

SSA doesn’t allow a person to open or contribute to an existing HSA once you are enrolled in Medicare. Any funds in an existing HSA can continue to be spent while on Medicare as before until the HSA is depleted. If a person is 65 or older and not enrolled in Medicare they can open or contribute to an HSA.
One other potentially confounding factor. If you are 65 or older, Medicare allows you to sign up for Part A even if you're using employer health insurance (and suggests that it's important for some people but not for others, depending on how your employer health insurance works). And it also will retroactively sign you up for the previous 6 months after you sign up (up to the age of 65--it won't sign you up earlier than that).

So, if you're older than 65.5 years old and are still using employer health insurance as you retire it means you can't fund an HSA for the 6 months before you retire. I almost got stuck with this. I retired at the end of May, 2019 at 66 years of age and started Medicare as of that June 1 after using my employer health insurance through my career. I had been putting the max in my HSA for years. Fortunately, my tax-attorney daughter mentioned something to me about it in the fall of 2018 and so I stopped my HSA contributions as of the end of the November, 2018. Otherwise I'd have been subject to penalties. I was rather irritated to find that Medicare retroactively signed me up for benefits for those previous 6 months when I didn't need them and that I had no choice in the matter. I had been planning on funding my total 2019 HSA before I retired but wasn't able to do so.

One other HSA-related issue that people need to know is that if your HSA is inherited by a non-spouse, the total is immediately taxable to the inheritors in the year that they inherit it. There's no stretch that allows them to take the funds over time as there is for IRA's. Spouses can inherit an HSA and use it as the original owner could use it, however. So, it's useful to your inheritors to spend down your HSA in your elderly years. An easy way to do it is by paying for/getting reimbursed for Medicare Part B/D and so on through your HSA. Also, remember you can get reimbursed for any medical expenses that occurred after your HSA was established if you have the appropriate receipts. So, you can save those receipts for years and then get reimbursed later in life after you HSA has grown significantly through investments.

https://www.medicare.gov/basics/get-star...ng-past-65

https://www.journalofaccountancy.com/iss...ge-65.html

https://www.irahelp.com/slottreport/why-...t-your-hsa