Insurance Premiums

You can include in medical expenses insurance premiums you pay for policies that cover medical care. Policies can provide payment for:

  • Hospitalization, surgical fees, x-rays, etc.,
  • Prescription drugs,
  • Replacement of lost or damaged contact lenses,
  • Membership in an association that gives cooperative or so-called "free-choice" medical service or group hospitalization and clinical care, and
  • Qualified long-term care insurance contracts (subject to additional limitations).

Pre-tax dollars - You cannot deduct insurance premiums paid with pre-tax dollars because the premiums are not included in your wages. If you have a policy that provides more than one kind of payment, you can include the premiums for the medical care part of the policy.

Employer-sponsored health insurance plan - Do not include in your medical any insurance premiums paid by your employer-sponsored health insurance plan, unless the premiums are included in your wages.

Medicare B - Medicare B is a supplemental medical insurance. Premiums you pay for Medicare B are a deductible medical expense.

Prepaid insurance premiums - Premiums you pay before you are age 65, for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65, are medical care expenses in the year paid, if they are:

1) Payable in equal yearly installments, or more often, and 2) Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years).

You cannot include premiums you pay for:

  • Life insurance policies,
  • Policies providing payment for loss of earnings,
  • Policies for loss of life, limb, sight, etc.
  • Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury, or
  • The part of your car insurance premiums that provides medical insurance coverage for all persons injured in or by your car because the part of the premium for you, your spouse, and your dependents is not stated separately from the part of the premium for medical care of others.