Is Wellcare Medicare?

Is Wellcare Medicare?

Find out how this type of health coverage is different from Medicare and which senior citizens can qualify for it.

Medicare Wellness Trusts

Medicare offers two wellness options for people with chronic illnesses. The first is for people with end-stage renal disease, and the second is a Medicare Wellness Improvement Act of 2016 that allows Medicare beneficiaries with chronic illnesses to enter into a Medicare wellness trust. The trust includes a health reimbursement account from which Medicare pays for preventive care and health-related expenses.

Eligibility Requirements

To qualify for Medicare wellness trust status, you must have one of the following chronic conditions:

Alzheimer's disease





Cardiovascular disease

Chronic obstructive pulmonary disease

Congestive heart failure

Coronary heart disease

Crohn's disease




Hepatitis C


Kidney disease


Metabolic syndrome


Organ transplant


Post-traumatic stress disorder


Sleep disorders



If you qualify for Medicare wellness trust status, you can have an HRA worth up to $1,000 per year, and you can also receive $500 from Medicare each year if your expenses exceed that amount.

What Is an HRA?

A health reimbursement account (HRA) is a tax-advantaged account from which you can pay for medical expenses. The amount you can put in an HRA is limited by the IRS, and you can only use the money in the account to pay for qualified healthcare expenses.

Qualified medical expenses include:

Doctor visits

Diagnostic tests

Durable medical equipment

Hospital stays

Medicare premiums

Mental health care

Prescription drugs


You can use your HRA to pay for preventative care services, but you can only do so when they are recommended by your doctor. Preventative services can include:

Physical exams

Preventative dental care

Preventative dental care Pre-natal and post-natal care

Screenings and tests

Wellness visits

HRA Tax Deductions

Money you put into an HRA is tax deductible, and withdrawals you make to pay for qualified medical expenses are tax-free. You don't pay taxes on money you contribute to an HRA, and you don't pay taxes on any interest or earnings you make on the money.

When you make a withdrawal from an HRA, you can deduct the withdrawal from your taxes if you have a high-deductible health plan or if you have a health savings account. You can also deduct your withdrawal if you don't have an HSA or HDHP and you receive advance payments from Medicare (Medicare Advantage) or private insurance companies.

Medicare HRA Tax Penalties

Money you take out of your HRA to pay for non-qualified medical expenses is subject to a 20% tax penalty. In addition, if your HRA is part of an HDHP, your plan must charge you an additional 20% tax penalty to offset the excise tax that you don't pay on the tax-free withdrawals you make from your HRA.

Medicare HRA Requirements

The HRA and HSA health-reimbursement accounts are similar, but they do have some key differences.

An HRA must be a trust, and the trust must be irrevocable. This means it cannot be changed or terminated by the trust maker (in this case, Medicare).

The HRA must be created by the HRA holder. If you have a trust, you can add the HRA to it or create a new trust for the HRA.

You cannot use the HRA to pay for health insurance premiums.

You can pay for any medical expenses you can pay for with an HSA except for insurance premiums.

Medicare HSA Requirements

You cannot have an HSA if you qualify for Medicare.

You can have an HSA if you already have an HRA.

You can create the HSA yourself or have someone else create it.

You can use the HSA to pay for your provider's out-of-pocket medical expenses or for insurance premiums.

Tax Deductible HRA Withdrawals

You can take money out of your HRA to pay for qualified medical expenses. If you use the money to pay for insurance premiums, the withdrawal is not tax-deductible. If you withdraw the money to pay for a medical expense you could have paid for with an HSA, you cannot deduct the withdrawal on your taxes, even if you have an HSA.

Wellness Trusts

Medicare wellness trusts allow you to save money in an HRA to pay for healthcare expenses. The trust can also be used to pay for non-medical expenses, and the money can be saved indefinitely.

You can set up a Medicare wellness trust yourself, or you can hire someone to do it for you. The trust is set up for a period of three to five years. You can choose to renew it if you like, but the money that you put in the trust cannot be withdrawn before the end of the term of the trust.

Are Medicare Wellness Trusts Tax Deductible?

Moneys put into a wellness trust are tax deductible. You must be under 65 to qualify for the deduction. The IRS allows you to deduct contributions to your HRA in the year you make them. You can also deduct the contributions on your taxes in the year you make a withdrawal from your HRA.

Since you can withdraw the money from your

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