Are Health Insurance Premiums Tax-Deductible for Retirees in 2025?
As health care costs continue to rise, many retirees in the United States are searching for ways to reduce their medical expenses — including through tax deductions. One of the most frequently asked questions is: Are health insurance premiums tax-deductible for retirees in 2025?
The short answer: Yes — in many cases, retirees can deduct health insurance premiums, but it depends on a few key factors such as income level, type of insurance, and how you're filing your taxes.
✅ Who Qualifies for the Deduction?
Retirees — whether fully retired or semi-retired — may be able to deduct certain health insurance premiums if they meet the IRS criteria.
Here's how you may qualify:
- You itemize deductions on your federal tax return using Schedule A.
- Your total unreimbursed medical expenses (including premiums) exceed 7.5% of your Adjusted Gross Income (AGI).
- You are not receiving subsidized coverage paid with pre-tax dollars (such as through an employer-sponsored retirement plan).
💡 What Health Insurance Premiums Can Retirees Deduct?
Retirees may be able to deduct the following eligible premiums:
| Type of Coverage | Deductible? |
|---|---|
| Medicare Part B | ✅ Yes |
| Medicare Part D | ✅ Yes |
| Medicare Supplement (Medigap) | ✅ Yes |
| Long-Term Care Insurance (limits apply) | ✅ Yes |
| Private Marketplace Plans | ✅ Yes |
| COBRA Continuation Coverage | ✅ Yes |
| Employer-sponsored retiree coverage | 🚫 Usually not (if pre-tax) |
🔎 Note: If your premiums are automatically deducted from Social Security, they are still considered paid by you and can be included.
🧾 How to Deduct Health Insurance Premiums in 2025
- Track all eligible medical expenses. Include premiums, prescription costs, dental care, vision, and co-pays.
- Calculate 7.5% of your AGI. Only the portion of your medical expenses above this threshold is deductible.
- Itemize your deductions using Schedule A (Form 1040).
- Keep receipts and documentation to support your deduction in case of an IRS inquiry.
📊 Example Deduction for a Retired Couple (2025)
- Adjusted Gross Income (AGI): $60,000
- 7.5% of AGI = $4,500
- Total Medical Expenses = $9,000
- Deductible Amount = $4,500 ($9,000 - $4,500)
This couple can deduct $4,500 in medical expenses — including qualified health insurance premiums.
🔄 Can You Deduct Long-Term Care Insurance?
Yes, but there are age-based deduction limits for 2025. Here's a breakdown:
| Age | Max Deductible LTC Premium (2025 est.) |
|---|---|
| 60–69 | $5,880 |
| 70+ | $7,290 |
Long-term care premiums are subject to limits, but still offer a valuable tax break for older retirees.
❗️ When You Can’t Deduct Premiums
- Your premiums are paid using pre-tax dollars (such as through an employer or pension).
- You take the standard deduction instead of itemizing.
- You are reimbursed for those expenses through a Health Reimbursement Arrangement (HRA) or similar account.
🧓 Special Considerations for Early Retirees (Under 65)
If you retire before age 65 and purchase private insurance or COBRA, you may be able to deduct those premiums — again, if you itemize and meet the 7.5% AGI threshold.
For those using ACA marketplace plans, the deduction is only available for out-of-pocket premium costs, not portions covered by tax credits.
🧾 Should You Itemize or Take the Standard Deduction?
For 2025, the standard deduction is:
- $14,600 for individuals
- $29,200 for married couples
- + $1,950 for each person over age 65
If your total itemized deductions, including medical expenses, exceed the standard deduction — it may be worth itemizing.
✅ Conclusion: Health Insurance Tax Deductions for Retirees in 2025
In 2025, retirees can deduct health insurance premiums if they meet the IRS criteria — mainly if their medical expenses exceed 7.5% of their AGI and they itemize deductions. This includes premiums for Medicare, private insurance, and long-term care policies.
Pro tip: Keep detailed records and consider speaking with a tax professional to ensure you maximize your eligible deductions.