Any Other Way to Pay Part B Other Than SS Withdrawal?

kstein

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Anyone know if a Medicare eligible client on A/B can actively elect to not have Medicare premiums taken out of their Social Security benefits and then pay the premiums directly using monies from a medical savings account…..

Any idea as to whether this is possible? I’m wondering if there is any benefit….. is the taxable portion of Social Security reduced by Medicare premiums? If so, it would be a wash when compared to using the tax-advantaged medical savings account funds…..I had an advisor ask me this and I wanted to get some feedback. I'll of course take credit for the answer! My thoughts are that Part B has to be taken out of SS and they can itemize the deduction and then pay for the deduction out of a MSA or HSA but I'm not close to 100% sure.
 
You can use HSA funds to pay Medicare Part B but if the SS benefit is non-taxable I don't see a reason to use the HSA to pay those premiums. I have purposely sidestepped the "paying B vs deducted from SS" because I don't know and am too lazy to look it up.
 
I have clients write themselves a check (or submit for reimbursement) in Dec for 12 months of Part B premium from their HSA account.

I don't think there is a mechanism in place at SSA if they are getting social security to pay Part B directly. They can only do that when the Medicare beneficiary is not receiving Social Security.
 
I have clients write themselves a check (or submit for reimbursement) in Dec for 12 months of Part B premium from their HSA account.

What happens if they die in January?
 
I've had some wine and I am not a CPA. but here goes...

Scenario 1: No one dies. Part B Premiums are deducted from Social Security. In Dec, you can submit a claim against your HSA for reimbursement for 12 months of premium

Scenario 2: You are taking Part B, but not social security. The bills are received quarterly and paid directly from your HSA account

Scenario 3: You plan on submitting a claim in December for 12 months of premiums, but die in June. You are married at the time of your death, so the HSA transfers to your spouse. Your spouse now owns the HSA and submits for the 6 months of reimbursement after your death. (HSA's are automatically transferred to a spouse. You cannot leave it to anyone else, unless your spouse precedes you in death)

Scenario 4: You plan on submitting a claim in December for 12 months, but you die. Your spouse was already dead. Your kids were written out of your will. So cousin Betty in Wasta, SD (home of the Redwood Motel), who you've never met, gets the HSA funds. She isn't able to file a claim for the 1257.60, but since she never knew you, she is just happy with the influx of cash in your HSA ;)
 
So, how much do you charge for tax advice and do you have connections that can make people ........... disappear?
 
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