How Long to Keep Medicare Statements After Death?

Managing a deceased person’s financial and medical documents can be a complex task. Executors, family members, or administrators often need to know how long to retain specific records. Medicare statements are among these documents. Understanding their purpose and retention period is important for post-death responsibilities. Proper record-keeping ensures financial and legal obligations are met.

Understanding Medicare Statements

Medicare statements provide an overview of healthcare services and how they were processed by Medicare. For individuals enrolled in Original Medicare (Parts A and B), the primary document received is the Medicare Summary Notice (MSN). This notice lists all services billed to Medicare, the amount Medicare paid, and the amount the beneficiary may owe. MSNs are summaries of healthcare activity and are not bills.

Conversely, those with private Medicare plans, such as Medicare Advantage (Part C) or Medicare Part D prescription drug plans, receive an Explanation of Benefits (EOB) from their plan insurer. An EOB details costs and coverage for healthcare services or prescriptions, outlining what the insurer paid and any remaining patient responsibility. Like MSNs, EOBs are informational documents, not direct bills, and they help beneficiaries understand how their claims were processed. Both types of statements are valuable for verifying services and charges.

Reasons for Keeping Statements After Death

Retaining a deceased person’s Medicare statements serves several important purposes. These documents provide substantiation for medical expense deductions that might be claimed on the deceased’s final income tax return, or on an estate tax return if the estate is subject to federal estate taxes. Medical expenses can sometimes be itemized deductions on Schedule A of Form 1040, and the Internal Revenue Service (IRS) requires specific documentation for these claims. The executor is responsible for preparing and filing these final tax returns.

Medicare statements are also essential for estate settlement. They help verify medical expenses paid by the estate and reconcile any outstanding medical bills with healthcare providers or other insurers. Should billing discrepancies or disputes arise, these statements provide necessary evidence to resolve them. These records also offer documentation in case of an audit by tax authorities, such as the IRS, or Medicare itself, regarding past claims or deductions. The executor must maintain these records to fulfill their fiduciary duties.

Recommended Retention Periods

The recommended period for retaining Medicare statements after death aligns with tax statute of limitations. The IRS has three years from the date a tax return was filed to initiate an audit. This period can extend to six years if there is a substantial omission of gross income (more than 25% of reported income). If a fraudulent return was filed or no return was filed at all, there is no statute of limitations, and records should be kept indefinitely.

For medical expense deductions, a claim for a refund must be filed within three years from the date the original return was filed or two years from the date the tax was paid, whichever is later. Keeping Medicare statements for at least three to seven years after the final tax return is filed is a prudent guideline, covering most audit scenarios. Longer retention may be advisable in specific situations, such as when there are unresolved billing disputes, if the estate is complex and subject to prolonged administration, or if substantial medical expenses were deducted that might attract scrutiny. These statements, while medical in nature, are financial records that support tax positions.

Disposing of Statements

Once the recommended retention period has passed, Medicare statements should be disposed of securely. These documents contain personal health information (PHI) and sensitive financial details, making proper disposal important to prevent identity theft or misuse. Shredding paper documents is a recommended method to ensure that the information cannot be reconstructed.

For any digital records, securely deleting files from electronic devices and cloud storage is necessary. This involves more than simply moving files to a recycle bin; it requires using secure deletion methods that overwrite the data. Protecting personal information during disposal is a final step in managing a deceased person’s records.