US residents can use a health savings account and Medicare coverage to pay for medical expenses. Medicare offers a high-deductible health insurance plan used with a medical savings account, with the deductible varying depending on the chosen plan. Those with Medicare Part A or Part B are eligible, but it is not available for those with group health plans or federal employee benefits. Funds remaining in the account at the end of the year accrue interest and are tax-free when withdrawn for medical expenses.
People living in the United States can combine a health savings account and Medicare coverage to pay for their health care. Medicare offers a high-deductible health insurance plan that is used in conjunction with a medical savings account to pay for these expenses. Under the plan, money is deposited in the member’s name into a savings account. The money in the account grows tax-free until the funds are withdrawn to pay for medical expenses.
The first step in setting up this type of plan is to enroll in a high-deductible Medicare plan. The deductible is the amount the plan member will have to pay out of pocket before the health savings account and Medicare will pay any medical bills. Once the deductible level is met, the money in the health savings account is withdrawn and used to pay for medical care.
The amount of the deductible varies, depending on the plan chosen. People who have Medicare Part A or Part B are eligible to join a Medicare health savings account and plan if they want to. This option is not available to those who have coverage through a group health plan or federal employee benefits package. People who have end-stage renal disease or who are receiving hospice care are also not eligible for this type of health insurance plan. Anyone wishing to be covered under this option must reside in the United States for at least 183 days per year.
If the money deposited in the health savings account and the Medicare plan is depleted during the year, the plan member will have to pay the additional medical expenses out-of-pocket until the deductible level is met again. When a plan member pays for medical services up to the annual deductible, doctors and other health care professionals must ensure that the cost of services does not exceed the Medicare-approved amount. Once the deductible has been met again, the health savings account and the Medicare plan will pay for Medicare-covered services.
Any funds remaining in the health savings account at the end of the year remain in the account. They accrue interest until they are withdrawn to pay for medical care. A person who chooses a health savings account and a Medicare plan for her needs does not have to pay taxes on funds withdrawn from the health savings account if she is used to paying for health care.
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