Updated August 1, 2026. Quick answer: once you are 65 or older, your HSA can pay Medicare premiums tax-free — Part B, Part D and Medicare Advantage. It cannot pay Medigap. That single exclusion is written into the statute and it is the detail most sources either omit or state backwards, which matters because the two products sit side by side in every comparison a new enrollee reads.
The sentence that settles it
“You may not use HSA funds to pay for insurance, except for the following. Long-term care insurance. Health care continuation coverage (such as coverage under COBRA). Health care coverage while receiving unemployment compensation under federal or state law. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).”
IRS Publication 969, Qualified Medical Expenses
Everything turns on the parenthesis. Medicare and other health care coverage if you were 65 or older is the permission; other than premiums for a Medicare supplemental policy, such as Medigap is the carve-out. Note also what is allowed at any age and is separately useful: long-term care insurance, and COBRA continuation coverage.
What this is worth
The 2026 standard Part B premium is $202.90 a month, $2,434.80 a year. Paying it from an HSA means paying it with money that was never taxed going in and is not taxed coming out — the only account in the code that does both. For someone with a substantial balance and a long retirement, that is one of the few genuinely free things left in the system.
It also changes the withdrawal-order question. An HSA spent on Medicare premiums is strictly better than an IRA withdrawal used for the same bill, because the IRA dollar is taxed and raises the income that sets your future premium. Which account to draw from first covers the general sequencing; this is one of the clearest cases inside it.
The Medigap gap, and how to think about it
You cannot pay a Medigap premium from the HSA, and you should not let that decide whether to buy Medigap. A supplement that fits is worth more than the tax treatment of the premium. What the exclusion should change is the order you spend accounts in: use HSA dollars against the premiums that qualify, and pay Medigap from taxable money, rather than the reverse.
One asymmetry worth knowing: Medicare Advantage premiums do qualify. So the Advantage-versus-Medigap decision has a small tax edge on one side that no comparison chart shows you. Small, and nowhere near decisive against the coverage differences — but real.
Two costs Medicare never covers are worth spending HSA dollars on: dental, which is excluded by statute, and hearing aids, excluded along with the exam to fit them — though the over-the-counter category has changed what the latter costs.
Two things that are still true after 65
The catch-up contribution begins at 55, not 65, and it is $1,000.00. Unlike almost every other limit in the code it is not indexed to inflation — a fixed statutory amount that quietly shrinks in real terms every year.
And the withdrawal penalty for non-medical spending disappears at 65: the account behaves like a traditional IRA from that point, taxable but not penalised. It never stops being better than an IRA for medical costs, so spending it that way first is usually right.
Before you enrol, though
The tax-free premium payments start when you enrol. The contributions have to stop before that — and further before than seems reasonable, because Medicare backdates up to six months and turns those contributions into excess retroactively, at 6% a year for as long as they sit there. That page is the one to read first if you are still contributing.
Also worth pairing: what the full catch-up stack is worth if you are still accumulating, and HSA versus Roth IRA for the prior question of which account to fund.
Qualified-premium rules, the Medigap exclusion and the catch-up amount from IRS Publication 969, read August 1, 2026; the Part B premium from the CMS 2026 Federal Register notice. Annual HSA contribution limits are deliberately not stated here because the current-year figures were not verified at a primary source. General information, not tax advice.