Are Medicare Premiums Tax Deductible?
March 21, 2023 | Todd Lewison
Are Medicare Premiums Tax Deductible?
The short answer is yes, your Medicare premiums are tax deductible. Like most things regarding insurance and government programs, there is a certain level of nuance to what and how much qualifies for an itemized deduction.
Whether you have a Medicare Supplement (Medigap) plan and a stand alone Prescription Drug plan or a Medicare Advantage plan, your premiums and some medical expenses can be deducted from your taxes each year.
Related: Frequently Asked Questions about Medicare Advantage Plans
Most people have premium-free Part A, whether through working for ten-plus years on your own, or through your married partner. Part B premiums were $170.10 – $578.30 per month in 2022, going down to $164.90 – $560.50 per month in 2023, and so would qualify.
If you are on Part C, typically referred to as Medicare Advantage plans, coverage ranges from as little as $0 to as high as $197 per month – and qualifies. A different type of Medicare Advantage plan – Cost plans – while unique in their offerings and limited to select counties do count as medical insurance and so follow the same tax status as all other plans.
If you have Medigap Supplemental Insurance, your premiums on those plans in addition to your Prescription Drug Plan premiums qualify as well.
Related: Which Medicare Option is Right For Me?
Medicare, the IRS, & You
According to the IRS, you can deduct medical expenses more than 7.5% of your AGI for that year. The median income range for Minnesotans as an individual is $37,320 per the 2020 Census, which would mean you could claim $2,799. For households, it’s $73,382 or $5,503.65 worth of medical premiums and expenses.
Aside from strictly premiums you can also include medical and dental expenses of both you and your spouse on your tax returns. The IRS specifies that you, your spouse, a qualifying child, or a qualifying relative that you have paid medical expenses for may qualify. The current IRS Publication 502 for 2021 goes into greater detail about these terms. If you paid for these individual’s medical costs, you may qualify to itemize these expenses.
Below is a short list of some of the hardships that our clients have which are tax deductible:
- Ambulance services
- Annual physical exams
- Artificial teeth – needed to eat, excluding cosmetic
- Birth control pills – for those with qualifying children
- Capital expenses – such as those modifying your home to accommodate a disability
- Car – whether due to modification for a disability – wheelchair, or a qualifying trip to receive care. The standard medical mileage rate is 16 cents per mile
- Chiropractor’s visits
- Dental treatments – any preventative or comprehensive service, excluding teeth whitening or cosmetic surgery
- Diagnostic devices – such as those used to monitor blood sugar levels
- Eye exams or surgery
- Insurance premiums – medical care that you’re not claiming a credit or deduction on; medical care treatments such as hospitalization, surgical services, prescription drugs, and dental care
- Medicare – parts A, B, and D
- Oxygen – used with CPAP machines and the rental of such machines
- Therapy – received as medical treatment.
- Transplants – medical expenses from a donor or to you if you donated a kidney or other organ.
Twin City Underwriters
If you or a member of your immediate family have experienced any of these issues, we invite you to reach out to us at Twin City Underwriters for advice on making sure your plan gets you the coverages you need. As insurance agents with 50+ years’ experience, we regularly see clients who have been dealt hardships with their coverage. We find that having an experienced agent who can navigate the twists and turns of health insurance coverage and give you peace of mind, necessary.
Do you have questions about whether a health screening, treatment, or service is covered by Medicare? Twin City Underwriters can help! Contact us with questions.
Choosing a Medicare plan can be difficult. Twin City Underwriters helps Medicare recipients in Minnesota, Wisconsin, North Dakota, South Dakota, Iowa and Florida find the Medicare plan that meets their unique needs. Schedule a one-on-one meeting with one of our Medicare insurance brokers to get your questions answered!
Do you need help with Medicare, insurance and health plans? Explore your options with Allina Health Aetna, Blue Cross/Blue Shield of Minnesota, Medica and UCare. We work with you to find the best plan for your needs and budget. Contact us today to get started.
