Medicare health insurance premiums can be a significant expense—especially for high-income earners and married couples paying separately for coverage. Here’s what you need to know about how taxes factor in.
Medicare Part B: what it covers and who pays
Medicare Part B, often called Medicare medical insurance, helps cover doctors’ visits and outpatient services. Most people age 65 and older qualify, but it’s also available to some people with disabilities, ALS (known as Lou Gehrig's disease), and end-stage renal disease. Unlike Medicare Part A, Part B plans require monthly premiums, which can add up.
Your monthly Part B premium is based on your modified adjusted gross income (MAGI) from two years prior (as reported on your Form 1040. MAGI is your adjusted gross income (AGI) plus any tax-exempt interest.
In 2025, most individuals will pay a base monthly premium of $185 per person for Part B coverage.
Higher-income individuals pay an additional surcharge on top of the standard premium. In 2025, this surcharge applies if your 2023 MAGI was over $106,000 as a single filer or over $212,000 for joint filers. You can find a breakdown of 2025 Part B premiums and their applicable surcharges here.
Part B premiums, including any surcharges, are automatically deducted from your Social Security benefit payments and appear on the annual Form SSA-1099 from the Social Security Administration (SSA).
Part D prescription drug coverage premiums
Medicare Part D provides private prescription drug coverage, with base premiums that vary by plan. Higher-income individuals are subject to an additional surcharge on top of the base premium.
For 2025, this surcharge applies if you:
- Filed as an unmarried individual for 2023 with a MAGI above $106,000
- Filed jointly for 2023 with a reported MAGI over $212,000.
You can find each covered person's 2025 monthly Part D surcharges here.
You’ll pay the base Part D premium directly to your chosen private insurance provider. If you owe a surcharge, it will be deducted from your Social Security benefits and shown on your annual Form SSA-1099 from the SSA.
Deducting Medicare premiums
Medicare premiums can be combined with other eligible healthcare expenses to claim an itemized medical expense deduction. You can deduct the portion of total qualifying expenses that exceed 7.5% of your adjusted gross income (AGI).
Your 2024 tax return and 2026 Medicare premiums
The income reported on your 2024 Form 1040 will influence your 2024 MAGI, which will determine your 2026 Medicare premiums. If you’re self-employed or own a pass-through business (LLC, partnership, or S corporation), you have more flexibility to manage your MAGI through deductible retirement contributions or depreciation strategies.
Maximize savings on Medicare costs
Medicare premiums can add up quickly, and your 2024 tax decisions may directly impact what you pay in 2026. And, while 2026 may seem far off, smart planning now can help you avoid unexpected premium increases in the future.
Reach out to your Smolin advisor to discuss your options to minimize costs and optimize your financial situation.