My recent columns drew thousands of questions and comments, largely centered on rising medical debt and Medicare as well as retirement confusion on Social Security and health savings accounts, known as HSAs. The following is an edited sample of those 6,000-plus comments—good and bad!—and my take on them.
As always, if you have a personal finance question, you click here to drop me a note. I’ll try and answer in a future column.
Here we go. Let’s start with someone who wasn’t too happy with me:
While well intentioned, I was disappointed in your article. You neglected to mention that Medigap policies will cover all or most of what Medicare does not. Also: people you mention could likely be eligible for Medicare Savings Plans that will lower beneficiary costs. A Qualified Medicare Beneficiary or QMB is the most generous plan and covers all copayments and deductibles, the Part B premium, and also provides the extra help you noted.
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Kerry: Guilty. Regular Medicare does not come with built-in caps on a variety of out-of-pocket costs, so you don’t want to be enrolled in it if you don’t also have supplemental protection. The bills that lead to medical debt typically include routine healthcare services such as lab fees and diagnostic tests, dental care, and visits to the doctor, and long-term care services not covered by Medicare, according to KFF. And Medicare typically requires patients to pay out of pocket around 20% of their doctor bills. Many retirees can’t.
Now let’s talk about Medigap health insurance. Not everyone has this coverage. These policies are sold by private insurance companies and, as you noted, pay part or all of some leftover costs, such as outstanding deductibles, coinsurance, and co-payments, and may also cover healthcare costs that Medicare does not cover at all like most medical care received when traveling out of the US.
In most states, however, the guaranteed right to buy a Medigap is limited to the time when you first sign up for Medicare Part B. That’s because Medicare does not permit Medigap plans from rejecting you or charging a higher premium because of a preexisting condition during that period. In most states, your premium, however, will vary depending on factors such as your age, gender, and where you live.
The Medigap guarantee policy is also good if you joined an Advantage plan during your first year of Medicare but disenrolled within a year and switched to traditional Medicare. After that, though, Medigap plans in most states can flat-out reject you if you have a preexisting condition, such as diabetes. The exceptions are New York, Connecticut, Maine, and Massachusetts.
There is help out there as I noted if you have a limited income, you might be eligible for Medicare’s Extra Help, which covers Part D premiums and deductibles and caps drug costs. Free one-on-one counseling is available through state Health Insurance Assistance Programs (SHIP). The Medicare Rights Center offers a free consumer helpline: 800-333-4114. You can also contact Medicare directly at 800-633-4227.
QMB, that you mentioned, is a Medicaid program that helps low-income Medicare beneficiaries pay for their Medicare costs, such as premiums, deductibles, and copayments. It’s a secondary insurance, meaning it pays for Medicare cost-sharing after Medicare has paid its share.
I’m 60 and super worried about future long-term care costs. What might these add up to?
Kerry: One factor that plays into the rising healthcare debt for older adults is that traditional Medicare and Medicare Advantage do not cover the cost of long-term care in nursing homes and assisted-living facilities. An apartment in an assisted-living facility had an average rate of $74,148 a year in 2024, according to the National Investment Center for Seniors Housing & Care — and costs go up as residents age and need more care. Units for dementia patients can run more than $94,000.
About 80% of those ages 65 and over will require some long-term care, with nearly 20% requiring high-intensity care for more than three years, Anqi Chen, co-author of a brief from the Center for Retirement Research at Boston College, told me
Can one use the HSA contributions to pay for Medicare Part B & D costs or any other insurance plans they may have (Advantage, MediGap etc)?
Kerry: Yes, you can tap your health savings account to pay for Medicare premiums and other qualified medical expenses, including those covered by Medicare Parts A, B, C (Medicare Advantage), and D (prescription drug coverage). But it’s a hard no on using HSA funds to pay for Medicare Supplement (Medigap) plan premiums.
Learn more: What is a health savings account (HSA)?
My husband and I are retired, in our 70s and living in Mexico. My husband has a HSA he set up through his work probably 15 years ago. Can he use it for medical and similar expenses outside the US? Can we continue to contribute to the existing HSA?
Kerry: Yes, you can use your HSA to cover medical costs when you live outside the country as long as the expenses are qualified medical expenses under US law. You, however, might be docked a 1%-3% transaction fee if you are accessing your account with a credit card.
As for amping your account up, for now, you can’t contribute more money to an HSA at your age. Contributions are kaput once you are eligible for Medicare, typically starting on the first of the month you turn 65. A current bill before the Senate right now might tweak this eligibility if it becomes law.
I am about to retire and am planning to live in Canada. If I work and receive a salary of about 50K in Canada, am I bound by the Social Security Income limitations Receipt work limitation?
Kerry: This is one to take up with a Social Security officer directly. In general, if you live and work in another country, your Social Security income limits usually remain the same as if you were working in the US.
Here’s how it works: The earnings test applies only to people who are collecting Social Security between age 62 (the earliest age of eligibility) and their full retirement age, which is between 66 and 67, depending on the year you were born.
On the face of it, you’re allowed to claim Social Security retirement benefits while working, and the withheld benefits are not lost. Social Security recalculates monthly benefits when you reach full retirement age to credit back the withheld benefits. In general, the way the earnings test works is if you’re between age 62 and your full retirement age and earn over $23,400 (the limit is adjusted annually) and collecting Social Security, the administration will withhold $1 for every $2 over that limit.
For people hitting their full retirement age in 2025, the annual exempt amount is $62,160. This higher exempt amount applies only to earnings made in months prior to the month you hit your retirement age.
The good news is that the earnings test goes away at full retirement age.
But nothing is simple here. There is another method called the foreign work test. With this method, your income could impact your current benefit. If you are receiving Social Security benefits and are younger than full retirement age, SSA will withhold your benefits for each month you work more than 45 hours outside the United States and you are not subject to US Social Security taxes. It does not matter how much you earned or how many hours you worked each day. Check out How Work Affects Your Benefits (Publication No. 05-10069).
I’m 69 years old and plan to work until at least 72 or 73. My Social Security Income (SSI) benefits will be the bulk of my income upon retirement, and I am currently $40,000 in debt with a repayment plan that will eliminate all or most of the debt before I retire. The caveat is that I will need to claim my SSI benefits to support this payment plan. I turn 70 in September 2025 and would like to know when I can apply for my Social Security Income benefits to maintain the 8% increase until I reach 70 years old. Is it on my birthday in September, or do I need to wait until October 1st?
Kerry: To receive the maximum 8% increase in your Social Security benefit, you should apply for your benefits the month before your 70th birthday. This will ensure your benefits start the month of your 70th birthday, and you receive the full 8% increase for each year you delayed taking benefits after your full retirement age.
It typically takes at least a month, or 30 days, to receive your first Social Security check after your application is processed. It could be 45 days in some cases. The precise timing of your check delivery relies on processing times at the Social Security Administration.
Read more: When will I get my social security check?
During a recent operations meeting in April at SSA, an official from the agency reported that the field offices “are struggling right now to keep pace with the timeliness this year.” The fact that they are aware of this is a good thing, and, if they take action, the SSA will have this under control by the time you apply for your benefit.
In general, I recommend applying up to four months before you want to start receiving benefits.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work” and “Never Too Old to Get Rich.” Follow her on Bluesky.
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