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Medicare

Q&A: Couple worries about soaring ACA health care premiums

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Dear Liz: My wife and I have health insurance through the Affordable Care Act exchange. With the enhanced tax credit ending this year, our insurance bill could go up from $500 a month to about $2,000 a month. Are there any good options or plans you can recommend? Would filing taxes separately help if my wife’s income made her eligible for MediCal?

Answer: ACA premiums for next year have not been set, although the cost of coverage is expected to rise sharply after Congress ended enhanced premium tax credits that made coverage more affordable. The Peterson Center on Healthcare and KFF estimate that out-of-pocket premium payments will increase about 75% on average next year because of this change. In addition, insurers are asking for premium increases to cover rising healthcare costs and tariffs may further add to the cost of drugs, medical equipment and supplies.

Shop carefully during open enrollment, and consider a plan with a higher deductible to help control costs. You also could talk to a tax pro about ways to reduce your income in 2026, if it will help you qualify for a premium subsidy.

Just filing your taxes differently won’t get your wife qualified for MediCal, which is California’s Medicaid health insurance program for low-income people. MediCal looks at household income when determining eligibility. Actually being separated might work, but discuss this option with an attorney and a tax pro since it will have many legal and tax implications.

Q&A: Inherited IRA could increase tax bill and Medicare premiums

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Dear Liz: If someone inherits my retirement account, is there any way they can avoid having their Medicare premiums increased for one year?

Answer: A large-enough retirement account could affect their Medicare premiums for up to 10 years, not just one.

Normally inheritances aren’t taxable, but retirement accounts are the exception. Withdrawals from inherited retirement accounts are usually taxable as income, and most non-spouse inheritors must drain a retirement account within 10 years. Withdrawals from inherited Roth accounts aren’t taxable, but the accounts still must be drained by the inheritor within a decade.

If the inheritor is on Medicare, taxable withdrawals could boost income enough to increase their Medicare premiums, thanks to the income-related monthly adjustment amounts (IRMAA). This surcharge starts once modified adjusted gross income exceeds certain amounts, which in 2025 is $106,000 for single filers and $212,000 for married couples filing jointly.

Anyone who inherits a retirement plan should get advice from a tax pro, but that’s particularly important when withdrawals might affect tax brackets and Medicare premiums. The pro can help determine how quickly or slowly the money should be withdrawn to maximize how much the inheritor gets to keep.

Q&A: Delaying Medicare enrollment? What to know

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Dear Liz: When my husband was approaching 65, he was employed and covered by a high-deductible healthcare plan with a health savings account by his employer. Neither his employer nor our local Social Security office had concrete advice on how to proceed about enrolling in Medicare, but after tremendous research, he eventually delayed enrollment. Now I am approaching 65. My husband is still working, and I am still covered by his health insurance, although both are in his name. Do I enroll in Medicare at the appropriate time or do I delay enrollment like he did?

Answer: Delaying Medicare enrollment can result in penalties that can increase your premiums for life. If you or a spouse is still working for an employer with 20 or more employees, however, generally you can opt to keep the employer-provided health insurance and delay applying for Medicare without being penalized. If you lose the coverage or employment ends, you’ll have eight months to sign up before being penalized.

Delaying your Medicare enrollment also allows your husband to continue making contributions on your behalf to his health savings account. In 2025, the HSA contribution limit is $4,300 for self-only coverage and $8,550 for family coverage, plus a $1,000 catch-up contribution for account holders 55 and older. Once you enroll in Medicare, HSA contributions are no longer allowed.

Medicare itself suggests reaching out to the employer’s benefits department to confirm you are appropriately covered and can delay your application. Let’s hope that by now your employer’s human resources department has gotten up to speed on this important topic.

Q&A: Benefits of Medicare Advantage HMOs

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Dear Liz: You mentioned that Medicare Advantage Plans have networks that can change from year to year, as well as other disadvantages. This is not true for our Medicare Advantage HMO, according to my experience. The HMO has its own doctors and hospitals, but I have not noticed them pulling any surprises. And they do look after your health much better than the traditional Medicare that some of my friends are on. My friends’ care is entirely in their own hands, and some are getting very old and would benefit from the care that my HMO provides.

Answer: You’ve highlighted one of the key advantages of a Medicare Advantage HMO, which is coordinated care.

There are two main types of Medicare Advantage plans, the all-in-one private insurance alternative to original Medicare. With PPOs — preferred provider organizations — people are generally allowed to see medical providers outside their networks, although those visits will cost more. With HMOs — health maintenance organizations — you’re expected to stay in the network for most care, and you often need a referral to see a specialist. You could pay up to 100% of the cost if you use a doctor or hospital not in the HMO.

In exchange for those restrictions, people get a primary care provider who coordinates all of their care. That’s in contrast to PPOs or original Medicare, where a patient may have many providers who never talk to each other.

Q&A: Medicare Advantage to Original Medicare

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Dear Liz: I just read your answer about switching from Medicare Advantage plans to original Medicare, and how you might not be able to get an insurer to write you a supplemental Medigap plan. I was with a Medicare Advantage plan for years and then my medical group stopped participating. I have many preexisting conditions and would not be able to find adequate or affordable coverage if I had to apply for a supplemental plan. Luckily another insurer gave automatic acceptance to the 32,000 of us who were thrown out of our medical group so I was able to get full coverage through a Medicare supplement.

I hope you will repeat this info in several columns so consumers are better informed. I had no idea you couldn’t easily switch back and forth.

Answer: To recap, Medicare Advantage is the private insurance alternative to original Medicare. Like other private coverage, Medicare Advantage plans have networks and benefits that can change from year to year. Original Medicare benefits typically don’t change, but many expenses aren’t covered so you generally need a private insurance supplement to pay for those costs.

If you want to switch from Medicare Advantage to original Medicare after the first year, however, you normally don’t have “guaranteed issue” rights for a Medigap supplemental policy and you could pay a lot more for this important additional coverage.

There is a “nuclear option” that would give you guaranteed-issue rights again, and that’s moving out of your Medicare Advantage plan’s coverage area. You have to actually move, not just temporarily relocate. But you would be able to switch to original Medicare and get a guaranteed-issue supplemental plan.