Health savings accounts are already a great way for people with high-deductible health insurance policies to build up a tax-free stash of money for medical expenses. Your contributions are tax-deductible (or pre-tax if made through your employer), the money grows tax-deferred, and you can use it tax-free for eligible medical expenses in any year—even far into the future. Unlike flexible spending accounts, HSAs have no use-it-or-lose it requirement.
Under the current rules, you can use HSA money tax-free for out-of-pocket medical expenses, including your deductible, co-payments, prescription drugs and other medical costs that aren’t covered by your insurance, such as vision and dental care. You can also use HSA money to pay for a portion of long-term-care insurance premiums, based on your age (up to $410 in 2017 if you’re age 40 or younger; $770 if 41 to 50; $1,530 if 51 to 60; $4,090 if 61 to 70; and $5,110 if 71 or older). You can’t contribute to an HSA after you sign up for Medicare, but you can continue to use the money that was already in the account for out-of-pocket medical expenses, as well as for Medicare Part B, Part D and Medicare Advantage premiums.