At Age 70, a $4,800 Long-Term Care Premium Can Be Covered Tax-Free by an HSA Within the IRS Age Limit

Quick Read

• A 70-year-old paying $4,800 a year for long-term care insurance falls within the $4,960 HSA cap for her age, so the full amount can be taken tax-free.

• Once Medicare begins, new HSA contributions stop, but tax-free withdrawals for qualified medical expenses remain available at any age.

• She may also reimburse herself from the HSA for premiums already paid from checking, provided those costs were incurred after the account was opened.

A retiree who is 70 years old pays $4,800 each year for long-term care insurance out of her checking account. At the same time, the health savings account she accumulated while working remains unused, even though it was created for expenses like this.

Here is how the HSA can cover that premium tax-free, how much the IRS allows her to use at her age, and how she can pay herself back for premiums already covered with out-of-pocket money. First, a reminder: a health savings account, or HSA, is tied to a high-deductible health plan. Contributions go in tax-free, earnings grow tax-free, and withdrawals are tax-free when used for medical care.

Medicare Stops New Contributions, but Withdrawals Stay Tax-Free

After enrolling in Medicare, she can no longer make new HSA contributions. The IRS states: "Beginning with the first month you are enrolled in Medicare, your contribution limit is zero." Withdrawals are treated differently. Under 26 U.S.C. § 223(f)(1), money taken from an HSA and used only for qualified medical expenses is not counted as income. Those withdrawals are tax-free at any age.

Her Premium Qualifies, but Only Up to an Age-Based Limit

As a general rule, HSAs cannot pay insurance premiums. One exception applies to a qualified long-term care insurance contract under § 223(d)(2)(C)(ii). The IRS says these premiums are subject to annual age-based limits. The limits for 2026, based on age as of December 31, are shown below:

At age 70, her limit is $4,960, so her $4,800 premium is $160 below the cap. That means the full amount can come from the HSA tax-free. If she reaches 71 before year-end, the limit rises to $6,200.

If a premium exceeds the limit, the excess is not a qualified expense and cannot be paid from the HSA tax-free. In that case, the extra amount must come from checking. Married couples receive a separate cap for each spouse because the limit applies per person.

Why Itemizing Usually Does Not Beat the HSA for Retirees

The same capped amount can also qualify as a medical expense on Schedule A. But § 213(a) allows a deduction only for medical costs above 7.5% of adjusted gross income.

For example, with adjusted gross income of $80,000, the first $6,000 of medical expenses would not generate any tax benefit. That is more than her entire premium. She would also need total itemized deductions to exceed the standard deduction for single filers in 2026, which is $16,100, and many retirees do not reach that level. By contrast, the HSA route allows every dollar up to the cap to come out tax-free without any threshold.

She also cannot use both tax breaks on the same expense. The IRS says you "can't deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA."

Check That the Policy Is Tax-Qualified

All of this depends on the policy meeting the tax-qualified standard. IRS rules require the contract to be guaranteed renewable, to have no cash surrender value that can be borrowed or pledged, to use refunds and dividends only to reduce future premiums or increase benefits, and generally not to cover expenses Medicare would pay.

Look at the first page of the policy or the outline of coverage. Qualified policies usually state that they are intended to be tax-qualified under Section 7702B(b). If that wording is missing, she should contact the insurer and request written confirmation.

Hybrid life insurance and long-term care policies follow a different framework. In those contracts, the long-term care portion is treated as though that part were a separate contract, and amounts taken from the policy's cash value are not deductible under section 213. If she owns a hybrid policy, the insurer should specify which portion of the premium applies to qualified long-term care coverage.

Other Medicare Costs the HSA May Cover

If she is 65 or older, her HSA can also pay for Medicare and certain other health coverage costs. That includes Part B, which costs $202.90 a month in 2026, along with Part D and Medicare Advantage premiums. Medigap premiums do not qualify.

Those Part B and Part D amounts are only the starting point. Income-related surcharges and coverage gaps can add thousands of dollars a year for retirees who do not expect them, and a separate free guide, Medicare's Hidden Bills, covers those costs in detail.

Reimburse Herself Before the Paper Trail Disappears

She does not need to send the HSA directly to the insurer. The IRS allows tax-free HSA withdrawals to pay or reimburse qualified medical expenses incurred after the account is established, and there is no requirement to withdraw money every year. That means she can reimburse herself now for premiums previously paid from checking, up to the applicable annual age limit, as long as the premiums were paid after the HSA was opened and were never deducted. Premiums paid before the account was opened do not qualify.

She should keep records proving that each withdrawal was used for qualified medical expenses, was not reimbursed elsewhere, and was not claimed as an itemized deduction in any year. Premium statements and bank records should be sufficient.

The two key steps are straightforward: first, confirm that the policy is tax-qualified; second, total the premiums paid since the HSA was opened and reimburse herself, using the limit that applied in each year. She should not also deduct those same premiums on Schedule A, because doing so would make the HSA withdrawal taxable.