Are Health Insurance Premiums Tax Deductible for Retirees?

Health insurance premiums are tax-deductible for retirees, but whether the deduction produces any actual tax savings is a different question. Most retirees claim premiums as part of the itemized medical expense deduction on Schedule A, which only reduces your tax bill to the extent your total medical costs exceed 7.5% of your adjusted gross income, and only if itemizing beats the standard deduction. A smaller group of retirees with self-employment income can skip both hurdles. A larger standard deduction for people 65 and older, in effect for 2025 through 2028, has made the itemizing question harder to win than it used to be.

Which Premiums Count

The premiums retirees typically pay are treated as medical care under the tax code, provided you paid with after-tax dollars and were not reimbursed.¹ That includes:

Medicare Part B, at a standard monthly premium of $202.90 in 2026, including any income-related monthly adjustment amount (IRMAA). The premium counts even when it’s withheld automatically from your Social Security check.²
Medicare Part D prescription drug premiums, including any IRMAA surcharge.
Medicare Advantage (Part C) premiums.
Medicare Part A premiums, if you pay them. Most retirees get Part A premium-free based on work history.³
Medigap (Medicare supplement) premiums.
Private health insurance you buy outside Medicare or an employer plan.

Premiums for yourself, a spouse, or a dependent all qualify. If a former employer subsidizes your retiree coverage, only what comes out of your own pocket counts. Anything run through a cafeteria plan or reimbursed through a health reimbursement arrangement was paid with pre-tax dollars and is excluded.⁴

Long-Term Care Premiums Have Age-Based Caps

Qualified long-term care insurance premiums count toward the medical expense total, but only up to an annual limit set by age. For 2026:⁵

Age 40 or under: $500
Age 41 to 50: $930
Age 51 to 60: $1,860
Age 61 to 70: $4,960
Age 71 or older: $6,200

The cap is per person, so a couple both 71 or older can include up to $12,400 combined. You take the lower of what you actually paid or the age-based limit, then add that figure to the rest of your qualifying medical costs.

The 7.5% Floor and the Standard Deduction Hurdle

Premiums only produce a deduction to the extent your total qualifying medical expenses exceed 7.5% of your adjusted gross income for the year.³ AGI for a retiree includes pension distributions, taxable Social Security, IRA withdrawals, and investment income. A retiree with $50,000 in AGI needs more than $3,750 in unreimbursed medical costs before any deduction shows up on Schedule A, and only the amount above that floor counts.

Then comes the bigger question: does the total of your itemized deductions beat your standard deduction? For 2026, the base standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.⁶ Retirees 65 and older add a traditional age-based amount (roughly $2,000 per person for singles, $1,600 per qualifying spouse for joint filers, indexed for inflation).

For tax years 2025 through 2028, there is an additional enhanced deduction of $6,000 per qualifying person age 65 or older, or $12,000 if both spouses qualify. This extra amount phases out above $75,000 of modified AGI for single filers and $150,000 for joint filers.⁷

A married couple both 65 or older and under the phaseout can therefore stack a combined standard deduction approaching $47,000. Your itemized total (medical costs above the 7.5% floor, plus state and local taxes, mortgage interest, charitable gifts, and so on) has to exceed that number for itemizing to help. Retirees with a mortgage paid off and modest state tax liability often find the standard deduction wins even in years with heavy medical spending.

The Self-Employment Shortcut

If you have net earnings from self-employment in retirement, from consulting, freelance work, a small business, or similar activity, you can deduct health insurance premiums above the line on Schedule 1 of Form 1040. That means no 7.5% floor and no requirement to itemize. You claim the full standard deduction and still deduct your premiums.⁸

Medicare Part B, C, and D premiums all qualify. Qualified long-term care premiums qualify too, but the age-based caps still apply. The deduction is limited to your net self-employment earnings for the year, so a retiree with $12,000 in consulting income and $15,000 in premiums can deduct $12,000 through this route. The remaining $3,000 can still go on Schedule A if you itemize.¹

Two disqualifiers to watch: you can’t take this deduction for any month you were eligible to participate in a subsidized health plan through an employer or your spouse’s employer, and if your business runs through an S-corporation where you own more than 2%, the corporation has to pay or reimburse the premiums and include the amount in your W-2 wages, or the deduction is lost.⁹

Paying Premiums Tax-Free From an HSA

If you funded a health savings account during your working years, you have a separate way to get a tax benefit on retirement premiums. After age 65, HSA distributions used to pay Medicare Part A, Part B, Part D, or Medicare Advantage premiums come out completely tax-free as qualified medical expenses.¹⁰

Medigap premiums are the notable exception. HSA money spent on a Medicare supplement policy is taxed as ordinary income, though the 20% penalty that applies before age 65 no longer applies. Qualified long-term care premiums can be paid tax-free from an HSA, subject to the same age-based caps described earlier.

Premiums paid with tax-free HSA distributions can’t also be included in your Schedule A medical expenses. The tax benefit is one or the other, not both.

Retired Public Safety Officers

Retired law enforcement officers, firefighters, chaplains, and ambulance or rescue squad members have a narrow additional option. If you retired from public service because of disability or after reaching normal retirement age, you can elect to exclude up to $3,000 per year from your taxable retirement plan distributions when that money goes to pay health or long-term care insurance premiums.¹¹

The distribution has to come from an eligible governmental retirement plan maintained by the employer you retired from, and premiums can cover you, your spouse, or dependents. The excluded amount can’t be double-counted as a Schedule A medical expense.

Premiums That Don’t Qualify

A few common costs look deductible but aren’t:

Anything paid with pre-tax dollars through a cafeteria plan, FSA, or similar arrangement.
Premiums your former employer’s HRA or retiree plan reimburses.¹
Insurance that covers only cosmetic procedures.
Disability income policies that replace lost wages rather than pay for medical care.

For most retirees in 2026, the deductibility question is really two questions in sequence: do the premiums qualify (usually yes), and does the deduction actually save any tax (often no, once the 7.5% floor and the enlarged senior standard deduction are accounted for). If your unreimbursed medical costs in a given year are unusually high, or if you have self-employment income, the answer flips in your favor.

1
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
2
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
3
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
4
Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
5
Internal Revenue Service. Publication 554 (2025), Tax Guide for Seniors
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Internal Revenue Service. Check Your Eligibility for the New Enhanced Deduction for Seniors
8
Internal Revenue Service. About Form 7206, Self-Employed Health Insurance Deduction
9
Internal Revenue Service. S Corporation Compensation and Medical Insurance Issues
10
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
11
Office of the Law Revision Counsel. 26 USC 402 – Taxability of Beneficiary of Employees Trust