Dear Liz: During the 2024 open enrollment period for Medicare, your column mentioned that Part D enrollees’ out-of-pocket payments in 2025 would be limited to $2,000, but only for covered prescriptions. That spurred me to be sure my prescription drug plan covered the one brand name drug I take. It didn’t and I found the only plan in my area that does just in time before the open enrollment period ended.
More recently, I learned from your column that I can pay Medicare premiums from my health savings account. Like many HSA participants, I have been letting my contributions accumulate for later-in-life medical expenses. But now that my husband and I are investigating moving into a continuing care retirement community, it helps to know that we have the option of paying Medicare premiums this way and have more money left over each month after we pay the monthly fee.
Answer: Thanks for sharing those experiences!
It can be easy to leave our finances on automatic, but there are at least two areas where it’s important to shop every year: health insurance and auto insurance. Health insurers constantly change their formularies, or list of covered drugs, as well as what tier a drug might be assigned to. A prescription you get cheaply this year could be more expensive next year or not covered at all. Auto insurers, meanwhile, tend to raise rates on loyal customers because they know many people will stay put out of inertia.
It’s also important to have a plan to eventually spend HSA funds before you die. A spouse can inherit an HSA and retain its tax advantages, but the account becomes taxable if anyone else inherits it.
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