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Can You Deduct Medicare Advantage Premium from your Taxes?

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Summary: If you itemize your deductions on the 1040 form when you file your taxes, you might be able to deduct your Medicare Advantage premiums.

According to the Internal Revenue Service (IRS), you may be able to deduct insurance premiums, including your Medicare Advantage premium, from your taxes if you itemize your deductions on the 1040 form.

How much is my Medicare Advantage premium?

The amount of your Medicare Advantage premium depends on your plan. Some Medicare Advantage plans may have a $0 monthly premium, for example, and some Medicare Advantage plans may have a $98 monthly premium or other amount. In addition to your Medicare Advantage premium, you may be required to pay to a Medicare Part B premium.

How much is the average Medicare Advantage premium*

The average monthly Medicare Advantage premium* is $8 as of the first quarter of 2019. That’s down 33% from the same quarter in 2018, according to an eHealth study.

MA Average Premium

Source: Medicare 2019 Open Enrollment: Costs and Sentiments, May 2019

What is a tax deduction?

According to the IRS, a tax deduction is something you subtract from your income before you figure out the amount of tax you owe. Tax deductions can be work related, itemized, or for education, health care, and investments.

For example, if your income is $40,000 a year and you have $1,000 of deductions, you taxable income may therefore be $39,000. More deductions may mean you owe less in taxes. However, a deduction is not the same as a refund. Having $1,000 in deductions does not mean that you will get a refund for this amount from the IRS.

Is my Medicare Advantage premium tax deductible?

According to the IRS, if you itemize your deductions, you may be able to deduct medical and dental expenses for yourself, your spouse, and your dependents. However, you may only deduct the amount of your medical expenses that exceed 7.5% of your adjusted gross income.

The IRS specifically states that deductible medical expenses include payments for insurance premiums for policies that cover

  • Medical care
  • Qualified long-term care

People who are employees generally can’t include premiums they pay under an employer-sponsored policy. Since Medicare Advantage premiums cover medical care and are not employer-sponsored, they generally would qualify for a tax deduction.

Can I get a deduction for my Medicare Advantage premium if I don’t itemize my deductions?

You can only get a tax deduction for your Medicare Advantage premium if you itemize deductions. According to the IRS, most taxpayers claim the standard deduction when they file their federal tax return and don’t itemize deductions.

In 2019 the standard deduction for married couples filing jointly is $24,400.

In 2019 the standard deduction for single taxpayers and married individuals filing separately is $12,200.

Let’s say for example, that you pay $98 a month for your Medicare Advantage plan or $1,176 a year. If this is your only deduction, you may be able to claim a much higher deduction by opting for the standard deduction and not itemizing.

To find out more about Medicare Advantage plans, enter your zip code on this page.

This article should not be relied on for tax advice. Please consult a tax advisor who understands your particular circumstances in order to see what, if any, part of your medical expenses may be tax deductible. This article is for general information and might not be updated after publication.

* This report reviews costs and trends among people who purchased Medicare insurance products through eHealth during January 1 through March 31, 2018 and the same period in 2019.

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