On January 1 of this year every bronze and catastrophic plan sold on the health insurance exchanges became a qualifying plan for a health savings account, whether or not it meets the deductible and out-of-pocket tests that define such a plan in the tax code. Congress did not conform the plans to the definition. It wrote around the definition. The share of plans on the federal exchange flagged as eligible went from 4 percent to 35 percent.
For someone in their early sixties buying their own coverage before Medicare, this is the first time the account has been widely available at the age when it is most useful. It is also the age at which the window is about to shut, and it shuts on a date most people calculate wrongly. Eligibility to contribute does not end at 65, or at retirement. It ends at Medicare enrollment, which can reach backwards.
What Qualifies Now
Two changes, both permanent. Bronze and catastrophic exchange plans now count, including the same plan bought off the exchange. And a direct primary care arrangement, the monthly membership that buys a doctor's time, no longer disqualifies someone, provided the fee stays at or below $150 a month for one person or $300 for more than one. Those fees are themselves a reimbursable expense.
The cap cuts one way only. Above $150 a month the membership is still payable from an account but disqualifies the person from putting anything into one. The guidance is also specific about what the fee does not buy: procedures requiring general anesthesia, prescription drugs other than vaccines, and laboratory work not normally done in a primary care office.
For 2026 the contribution limits are $4,400 for self-only coverage and $8,750 for family, rising to $4,500 and $9,000 next year, plus $1,000 for anyone 55 or older. That catch-up has been $1,000 since 2009 and is not indexed, and each spouse must put their own catch-up in their own account.
The Mechanics of a Six-Month Backdate
Enrollment in any part of Medicare ends contributions. Not eligibility, enrollment, and Part A alone is enough. The contribution limit becomes zero beginning with the first month of enrollment.
The trap is that Part A reaches back. Someone who signs up after turning 65 gets Part A backdated six months, though never earlier than the month they turned 65. Contributions already made during those months, already deposited and already deducted on a filed return, become excess contributions after the fact. The penalty is a 6 percent excise tax, charged for every year the excess stays in the account, reported on a different form from the one most people associate with these accounts.
The advice follows directly: stop contributing six months before Medicare starts. What makes it easy to miss is that the decision is often made without anyone announcing it. Claiming Social Security enrolls a person in Part A automatically. And someone born on the first of a month has coverage begin the month before they turn 65, a deadline a month earlier than a neighbor born a day later.
What the Account Can Still Pay
Nothing in the account expires. Only contributions stop. After 65 the money can pay Medicare Part A, B, C and D premiums, long-term care premiums and ordinary medical costs. It cannot pay a Medigap premium. So the person who chooses Medicare Advantage at 65 can pay that premium from the account for the rest of their life, and the person who chooses Original Medicare plus a supplement cannot.
There are no required distributions at any age. After 65 a withdrawal for anything else is simply ordinary income, with no additional penalty. There is also no deadline for reimbursing an expense: a deductible paid out of pocket at 61 can be reimbursed tax free at 78, provided the receipts survive. At death the beneficiary designation decides everything, because a spouse inherits the account intact while anyone else receives the full balance as taxable income that year.
The Trade-Off Nobody Prices
A bronze plan pays about 60 percent of covered costs and carries an average 2026 deductible of $7,476, against a maximum annual contribution of $4,400. Cost-sharing reductions exist only in silver plans, so a lower-income buyer who moves to bronze for the tax account gives those up entirely. Enhanced premium tax credits expired at the end of 2025 and average net premiums rose 58 percent this year, which is the backdrop against which bronze enrollment jumped from 30 to 40 percent of the market.
The usefulness of the account peaks precisely in the years the law allows the least time to build it, because the catch-up contribution, the heaviest pre-Medicare medical spending and the last high-earning years all arrive together in a window that closes the month Medicare begins. Accountholders aged 55 and over averaged $7,178 at the end of last year, slightly less than one bronze deductible.
— John Stone