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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
The IRS now admits that Medicare insurance premiums count as health insurance premiums for purposes of the itemized tax deductions for medical expenses. Specifically, premiums for all four Medicare Parts â A, B, C, and D â should qualify and premiums for Medigap coverage should too.hese premiums also count as medical expenses for itemized deduction purposes, subject to the age-based limits shown below. For each covered person, count the lesser of: 1  Premiums paid in the applicable year or. 2  The applicable age-based limit.