I am unable to utilize the "once in a lifetime" transfer from my IRA to my existing HSA if I am over 65 and use Medicare (even if combined with HDP), correct?
Correct. Although it doesn't help your HSA amount any, you could look into a QCD instead (qualified charitable distribution). It will reduce your taxable income just as the HFD would have.
Please see this IRS webpage.
Please clarify where you saw these penalties. Was it in entering the 1099-R, or was it in the HSA interview? In my quick test, I am unable to reproduce this.
@Purcy
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