Can You Use Your HSA to Pay Medicare Premiums?

The Federal Rule for Health Insurance Premiums

HSA distributions are generally tax-free only when used for qualified medical expenses. Health insurance premiums are normally excluded, but Internal Revenue Code Section 223(d)(2)(C) creates several exceptions.

One exception applies after the HSA account beneficiary reaches Medicare eligibility age. It permits premiums for Medicare and other healthcare coverage, except a Medicare supplemental policy. IRS Publication 969 restates that rule and specifically identifies Medicare and other healthcare coverage for an account beneficiary age 65 or older, while excluding Medicare supplemental policies such as Medigap.

Two details matter:

1. The relevant age is the HSA account beneficiary’s age, not merely the age of the person whose premium is being paid.
2. The exception allows certain insurance premiums to be qualified expenses. It does not restore eligibility to contribute to an HSA after Medicare enrollment.

You can spend an existing HSA after enrolling in Medicare. You cannot make or receive new HSA contributions for months in which you are entitled to Medicare. Spending eligibility and contribution eligibility are separate rules.

Medicare Part A Premiums

Part A covers inpatient hospital care and certain related services. About 99% of Medicare beneficiaries do not pay a Part A premium because they or a spouse have sufficient Medicare-covered work history, according to CMS. If you do pay a Part A premium, an HSA can generally cover it tax-free once the account beneficiary is 65.

For 2026, CMS lists a reduced Part A premium of $311 per month for people with at least 30 quarters of covered employment, or who qualify through a spouse with that history. The full premium is $565 per month for certain people with fewer than 30 quarters. Those figures can change each year.

Example: Anthony, age 67, pays the full 2026 Part A premium of $565 per month. If he pays all 12 months, the annual total is $6,780. He may take $6,780 from his HSA tax-free to pay or reimburse those premiums, assuming they were not reimbursed from another source.

The Part A deductible is different from the premium. It is also generally a qualified medical expense, but under the ordinary medical-expense rule rather than the special premium exception.

Medicare Part B Premiums

Part B covers physician services, outpatient care, durable medical equipment, and other services. Most enrollees pay a monthly premium, and the amount is commonly deducted from Social Security benefits.

The standard Part B premium is $202.90 per month in 2026. That equals $2,434.80 for a full year. The annual Part B deductible is $283 in 2026. Both may generally be paid or reimbursed tax-free from an HSA for an eligible account owner, although the premium and deductible qualify under different parts of the medical-expense rules.

Higher-income beneficiaries pay an income-related monthly adjustment amount, or IRMAA, on top of the standard premium. Because this adjustment is part of the amount charged for Part B coverage, it is generally treated as an eligible premium cost. Keep the Social Security notice or Medicare billing record showing the full amount.

Example: Linda, age 68, pays the standard Part B premium throughout 2026. Social Security withholds $202.90 each month. Linda can request $2,434.80 from her HSA as a tax-free reimbursement for the year. She should retain her SSA-1099 and premium notice with her HSA records.

If Linda also pays the $283 Part B deductible from her checking account, she may reimburse that qualified expense separately. She must not reimburse the same cost twice.

Medicare Advantage Premiums

Medicare Advantage, also called Part C, is offered by private insurers approved by Medicare. An enrollee normally continues paying the Part B premium and may also pay a separate plan premium.

Medicare Advantage is not Medigap. It is a way to receive Medicare-covered benefits, so its premium generally falls within the post-65 exception for Medicare and other healthcare coverage. The separate Part B premium may also qualify.

Some Medicare Advantage plans have a $0 additional premium. That does not make the plan free, because the member still generally pays the Part B premium and may have deductibles, copayments, or coinsurance. An HSA distribution can reimburse only an amount actually paid for a qualified expense.

Example: James pays $202.90 per month for Part B and $45 per month for a Medicare Advantage plan in 2026. If he is eligible for the HSA premium exception for all 12 months, his potentially qualified annual premiums total $2,974.80: $2,434.80 for Part B plus $540 for the plan premium.

Medicare Part D Premiums

Part D provides prescription drug coverage. Its plan premium can generally be paid tax-free from an HSA once the account beneficiary is 65. A Part D IRMAA charge is also generally part of the premium cost.

Part D premiums differ by plan and location, so use the amount on your plan bill or Social Security record rather than a national estimate. If the plan premium is paid directly from a bank account while IRMAA is withheld from Social Security, retain evidence for both payment streams.

Prescription copayments and deductibles can also be qualified medical expenses. They are not insurance premiums, so the Medigap exclusion does not affect them.

Why Medigap Premiums Do Not Qualify

Medigap, also called Medicare Supplement Insurance, helps pay some cost-sharing left by Original Medicare. Federal law specifically excludes “a medicare supplemental policy” from the HSA insurance-premium exception. IRS Publication 969 names Medigap as the example.

That exclusion applies even after age 65. It also applies even though the policy may reduce healthcare costs and is regulated as Medicare supplemental coverage.

Suppose Evelyn, age 70, takes $3,000 from her HSA to pay annual Medigap premiums. The $3,000 is not a qualified HSA distribution solely because it paid Medigap. Evelyn generally includes it in federal gross income. Because she is over 65, the additional 20% tax does not apply, but ordinary income tax does.

If Evelyn is in a 22% federal marginal bracket and no other factor changes, the illustrative federal income tax is $660. Her actual result depends on her full return and state law.

Do not confuse the Medigap premium with medical cost-sharing that the policy does not cover. A qualified physician bill, deductible, or copayment paid out of pocket may still qualify under the ordinary HSA medical-expense rule.

The Account Owner Must Be 65

IRS Publication 969 includes a limitation that is easy to miss. If you, the HSA account beneficiary, are not yet 65, Medicare premiums for a spouse or dependent who is 65 or older are generally not qualified expenses under this exception.

Example: Nora is 63 and owns an HSA. Her husband is 67 and enrolled in Medicare. Nora generally cannot take a tax-free distribution from her HSA for his Medicare premiums under the age-65 insurance-premium exception because Nora, the account beneficiary, has not reached 65.

Once Nora reaches 65, the exception can apply, assuming the other requirements are satisfied. This age condition does not prevent her HSA from paying her husband’s ordinary qualified medical expenses before then; it concerns the special rule for Medicare and other insurance premiums.

Reimbursing Premiums Withheld From Social Security

Many people do not manually pay Part B or Part D premiums. The Social Security Administration deducts the premiums from their monthly benefits. That does not prevent an HSA reimbursement. The withholding is still a premium paid by the beneficiary.

A practical process is:

1. Determine the actual premium withheld for the reimbursement period. Review the Social Security cost-of-living notice, Medicare premium notice, SSA-1099, and any Part D or IRMAA statements.
2. Add only eligible premiums. Exclude Medigap and any amount reimbursed elsewhere.
3. Request a distribution from the HSA custodian, either periodically or as one annual reimbursement.
4. Keep the notices and proof of the HSA distribution with your tax records.
5. Report the distribution on Form 8889 using the qualified-expense amount.

You do not have to arrange for Medicare to debit the HSA directly. Reimbursing yourself after Social Security withholding is often simpler and creates a clear record.

Example: George’s 2026 SSA-1099 and Medicare records show $2,434.80 of Part B premiums and $480 of Part D premiums. He may reimburse $2,914.80 from his HSA if he meets the age rule and has not already been reimbursed. His monthly Social Security deposit was lower because of those premiums, but that payment mechanism does not alter their status.

Timing and Documentation

The expense must be incurred after the HSA was established. There is generally no federal deadline requiring an HSA reimbursement in the same calendar year, but the taxpayer must be able to substantiate the expense and show it was not reimbursed or deducted elsewhere.

For each premium, keep:

• The name of the insured person and type of coverage.
• The coverage month or period.
• The amount paid, including any IRMAA component.
• A billing statement, SSA notice, SSA-1099, bank record, or plan statement proving payment.
• A note showing that no employer, insurer, or other account reimbursed it.
• A record connecting the reimbursement to the HSA distribution.

An HSA custodian may allow a distribution without reviewing these documents. That does not make the distribution qualified. The taxpayer remains responsible for the classification.

Before Age 65: Narrower Premium Exceptions

The broad Medicare and other-coverage exception does not apply before the account beneficiary reaches 65. However, federal law separately permits HSA funds for certain premiums, including:

• COBRA and other qualifying continuation coverage.
• Health coverage while receiving unemployment compensation under federal or state law.
• Qualified long-term care insurance, subject to age-based limits.

These are specific exceptions. Ordinary individual-market or employer-plan premiums are not automatically qualified just because the HSA owner pays them personally.

State Tax Treatment May Differ

Federal qualification does not guarantee identical state treatment. California does not conform to the federal HSA regime and taxes HSA earnings while denying the federal contribution deduction. California basis tracking can change how a later distribution is reported at the state level.

New Jersey’s gross income tax also differs from the federal system. Residents of California or New Jersey should not rely solely on Form 8889 when determining state taxable income. Preserve contribution, earnings, and distribution records and consult current state instructions.

Common Mistakes to Avoid

Treating Medigap like Medicare Advantage

Medicare Advantage premiums generally qualify; Medigap premiums do not. The similar names do not produce the same HSA result.

Reimbursing a spouse’s Medicare premium too early

The HSA owner’s age controls the special premium exception. An owner under 65 generally cannot use it merely because a spouse is already enrolled in Medicare.

Counting the same expense twice

An expense cannot support two HSA reimbursements. It also cannot be both reimbursed tax-free and claimed as an itemized medical deduction.

Assuming Medicare enrollment closes the HSA

Enrollment stops new contributions, but the existing balance remains available for qualified distributions.

Using an estimate rather than the amount paid

Premiums can change during the year, and IRMAA can be adjusted. Reimburse the amount shown in final records.

Ignoring the tax result of an ineligible premium

After 65, an ineligible distribution generally avoids the additional 20% tax but still becomes ordinary income. That can affect more than the immediate income-tax bill. Learn how the balance can otherwise be used in What Happens to Unused HSA Money After 65?.

Frequently Asked Questions

Can I pay my Medicare Part B premium directly from my HSA?

Yes, if the HSA owner meets the age requirement. Direct payment may be possible, but reimbursement after the premium is withheld from Social Security is also acceptable when properly documented.

Can an HSA reimburse IRMAA?

Generally yes. Part B and Part D income-related adjustment amounts are part of the Medicare premium charged to higher-income beneficiaries. Retain the official notice stating the amount.

Can I use an HSA for a Medicare Advantage premium?

Generally yes after the HSA account owner reaches 65. Medicare Advantage is not Medigap.

Can I use an HSA for Medigap Plan G or Plan N premiums?

No. Medigap premiums are excluded from the HSA premium exception. A withdrawal used for them is generally taxable, although the additional 20% tax does not apply after age 65.

Can I pay my spouse’s Medicare premium from my HSA?

Generally yes if you, the HSA owner, are at least 65 and the other requirements are met. If you are under 65, your spouse’s Medicare premium is generally not qualified under this exception.

Can I reimburse several months at once?

Yes. You may take one distribution matching several documented eligible premiums. Keep a schedule showing the months and amounts.

Does the 2026 Part B deductible qualify too?

The $283 Part B deductible is generally a qualified medical expense, although it qualifies as medical cost-sharing rather than under the special insurance-premium exception.

May I still contribute to the HSA while using it for Medicare premiums?

Using the account is allowed, but Medicare entitlement makes the monthly contribution limit zero. Contributions made for Medicare-covered months can be excess contributions.

Primary Sources

• IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
• Internal Revenue Code Section 223, especially subsection (d)(2)(C)
• CMS: 2026 Medicare Parts A and B premiums and deductibles
• Medicare.gov: Medicare costs
• IRS Form 8889 and instructions

This article is general educational information, not personalized tax, financial, or medical advice. Verify annual Medicare amounts and obtain professional advice for unusual reimbursement or state-tax issues.