The high cost of health insurance premiums is front and center in the federal government shutdown. As usual, there’s no shortage of politicians pointing fingers and placing blame. But it is a reality that health care premiums are skyrocketing for virtually everyone, not just the people who have coverage through the Affordable Care Act.
For seniors who have coverage through Medicare, for example, the basic coverage for Part B is currently $185 per month. Part B covers outpatient hospital services, and next year the premium will be $206.50. Additionally, the deductible will increase by $38 to $288.
And that’s just part of the story. Because in 2024, more than 4.2 million seniors, about 8 percent of those on Medicare, paid significantly more in premiums. That’s due to the Income-Related Monthly Adjustment Amount, a surcharge applied to Parts B and D premiums for individuals with higher incomes. Some could be paying as much as an additional $443 for Part B, bringing the total to $628 per month.
I’m not aware of anyone, young or old, seeing a decrease in the cost of health insurance. But seniors on Medicare with high earnings are paying significantly higher premiums thanks to IRMAA.
In June 2025, the Medicare Board of Trustees reported that Medicare is looking at serious financial issues down the road. Issues that our elected officials need to address to make certain the program is on solid ground. I’m not suggesting that Medicare is going broke, just that it needs attention. Some difficult decisions need to be made. And soon.
Employers who pay for employee health insurance are quite aware just how expensive health insurance is. People who pay for coverage themselves, including those covered by the Affordable Care Act, also understand how expensive it is. And probably nobody understands more than those high earners on Medicare! The bottom line is quite clear; everyone is paying more for health insurance, regardless of age or income.
Solving our nation’s healthcare issues is well beyond the scope of this column. But I can offer a suggestion from a financial planning perspective. If you’re currently in the workforce and under age 65, ask your tax preparer or financial advisor if you’re eligible for a Health Savings Account. I’m a huge fan of the HSA. Think of it as a turbocharged IRA that can be used during retirement to help pay for medical expenses and deductibles not covered by insurance.
There is, however, an overabundance of rules and income calculations that determine if you’re eligible to participate. For example, your current health coverage must have a high deductible. And you don’t get to determine what’s considered a high-deductible plan. Uncle Sam does. If you’re eligible, deposits made into an HSA are tax deductible. What’s more, they grow tax free, and if the money is used for qualified medical expenses, they come out tax-free.
There are many Health Savings Account providers and a wide variety of investments from which to choose. That means careful research and due diligence are necessary. It’s important that you understand all the investment risks associated with contributions.
Financial Advisors can’t solve the high cost of medical care, but we can offer a tax favorable way to prepare for those skyrocketing costs. It’s worth the effort to determine if you’re eligible for an HSA.
Email your questions to kenmorris@lietimeplanning.com
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