The HSA: Your Secret Wealth Builder

Medicare ends your right to contribute but not your right to spend. From the first month you are enrolled in any part of Medicare, Part A included, your HSA contribution limit is zero (IRS Publication 969). The money already in the account stays yours, keeps growing tax-free, and can still pay qualified medical expenses tax-free for the rest of your life, including many Medicare premiums.

This matters most to people who keep working past 65 with an employer high-deductible plan. Turning 65 does not by itself end eligibility. Enrolling in Medicare does. If you are covered by a large employer's plan, you can usually delay Medicare without a late-enrollment penalty and keep contributing, including the $1,000 catch-up, until you enroll.

Is it worth delaying Medicare to keep contributing?

Sometimes, but ask your employer first. If you or your spouse are still working with employer coverage, you may be able to wait to sign up for Medicare without a late-enrollment penalty. When the job or the coverage ends, you have an eight-month Special Enrollment Period to sign up (Medicare.gov). Whether you must enroll at 65 depends on the employer plan, so ask the benefits office whether the plan requires Medicare to pay first. COBRA does not extend the Special Enrollment Period, so do not wait for COBRA to run out before signing up for Part B.

The gain from delaying is real but modest. At 2026 limits, a family HDHP with the catch-up allows $9,750 a year. In the 24% bracket, that saves about $2,340 of federal income tax, plus payroll tax on contributions made through a cafeteria plan, and the money can grow tax-free. Weigh that against your employer plan's deductible and network compared with Medicare plus a supplement. For many people at 65, keeping a good employer plan for a few more years and contributing to the HSA is the better choice. For others, Medicare is simply better coverage, and the HSA tax break is not worth staying on the employer plan.

Why stop contributing six months before you enroll?

Because premium-free Part A is backdated. If you sign up for Part A after your initial enrollment period, or apply for Social Security retirement benefits after 65, your Part A coverage starts up to six months before the month you apply, but no earlier than the month you turned 65 (Medicare.gov). Any HSA contribution made for those backdated months becomes an excess contribution. Medicare's own advice is that you and your employer stop contributing six months before you retire or apply for Social Security (Medicare.gov).

Social Security is the trap people miss. Claiming retirement benefits at 65 or later enrolls you in Part A, with the same backdating, whether or not you intended to join Medicare. If you want to keep contributing to an HSA while working, you generally have to delay both Medicare and Social Security. Our guide to when to claim Social Security covers the rest of that trade-off.

If your spouse is younger and not on Medicare, your family can often keep contributing. Your spouse can contribute to their own HSA if they are covered by a high-deductible plan and otherwise eligible, and the $1,000 catch-up belongs to each spouse's own account. Your Medicare enrollment does not disqualify them. Check the details with the plan administrator, since family coverage and spousal accounts interact in ways Publication 969 spells out.

Which Medicare costs can your HSA pay?

Once you are 65, the HSA can reimburse most Medicare premiums tax-free, but not Medigap. Publication 969 allows premiums for "Medicare and other health care coverage if you were 65 or older," and specifically excludes "premiums for a Medicare supplemental policy, such as Medigap."

Premiums deducted from a Social Security check count too: you can reimburse yourself from the HSA for Part B premiums withheld from your benefit, as long as you keep the records. With the 2026 standard Part B premium at $202.90 a month (CMS, 2026), a married couple both on Part B pays about $4,870 a year before any surcharge, so an HSA of $80,000 to $150,000 can cover premiums for many years. Spending it that way also keeps the withdrawals out of taxable income. That matters because a larger IRA withdrawal to pay the same premiums can raise the income that sets your future Medicare surcharges. Our Medicare enrollment and IRMAA guide explains those surcharges.