What Are Medical Expenses?

Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include dental expenses.

Medical care expenses must primarily be to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. Medical expenses include the amounts you pay for transportation to get medical care. Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract.

IRS Qualifying Medical Expenses for Health Savings Accounts

• Medical Expenses
  IRS publication 502 provides detailed information about medical and dental expenses. However, Publication 502 is written for use to determine the itemized medical expense deduction. There are two important differences when determining medical expenses for HSA purposes.
  
  - HSAs cannot be used for insurance premiums, except in special limited circumstances 
    such as (COBRA coverage while unemployed, or Long-Term Care insurance or after
    age 65 [except for Medigap]).
  - HSAs may be used for over-the-counter drugs and are not subject to the prescription
    drug limitation that applies to the itemized medical expense deduction.