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Can I set up an HCRA account and use it to pay medical insurance premiums?
posted at February 10, 2013 9:27 AM EST
First: February 10, 2013
Last: February 10, 2013
What's behind the question is really a tax issue. When I was working I had an HCRA account and money was deposited from my 'before tax income' to cover medical expenses. What was in the HCRA was thus tax free. When working, we usually did not itemize because the personal allowance was greater. However medical costs were also tax free by virtue of them being paid from the 'before tax income'.
Now that I'm retired it seems I cannot set up an HCRA. Like most, my wife and I still have sizeable medical expenses. Last year the combined premiums for a Medicare Supplement Plan and for Medicare Part B itself were around $7500. Because itemizing is still less than the personal allowance, but now our medical expenses are taxed!
It seems rather one sided that someone who is employed can shelter their medical costs from taxation yet once we retire we lose that ability. Am I missing some technique?