Premiums, copays and other Medicare costs

A plan premium is the amount you pay each month for your Medicare coverage.

Plan premiums can vary according to what plan you’re in. Be sure you understand what your plan’s monthly premium is.

A deductible is the dollar amount you may have to spend before your plan starts paying any share of your covered costs.
 

When comparing total costs of different Medicare plans, remember to count any yearly deductible in addition to the premium and copays or coinsurance.

A “copay” or “coinsurance” is the amount you may pay for services or prescription drugs:
 

• A copay is a fixed dollar amount, such as $10 for a doctor visit. 
• Coinsurance is a percentage of the cost, such as 20% of a covered fee.

When choosing a Medicare plan, it’s important to understand whether your share of the cost of covered services will be a copay or a coinsurance amount.

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s a premium markup for Medicare Part B and Medicare Part D charged to those with higher incomes.
 

Here are some important points about the IRMAA:
 

• If you owe an IRMAA, you will receive notice in a letter
• If you do not pay your IRMAA, you may lose your coverage
• IRMAA is determined directly by the Centers for Medicare & Medicaid Services

For this year’s IRMAA dollar amounts and more information, see the charts at www.medicare.gov.

Can you deduct your Medicare plan premium on your taxes? It depends. You need to meet certain IRS requirements to deduct any health expenses. 

To see whether a health expense is deductible, please review IRS Publication 502, Medical and Dental Expenses — online at https://www.irs.gov/forms-pubs/about-publication-502.

Note: This information is not offered or intended as tax advice. See your tax advisor, visit https://www.irs.gov or contact the Internal Revenue Service for tax information and guidance at 1-800-829-1040.