Retirement & Financial Planning Report

In 2012, the standard Medicare Part B premium is $99.90 a month. High-income seniors pay more. The amount of the high-income premium depends on income but it could be as much as $319.70 a month. Part B is health insurance, which generally covers doctors’ visits and outpatient procedures.

Medicare Part B does not cover prescription drugs. For that, you’ll need to buy a Part D drug plan or sign up for a Medicare Advantage plan with drug coverage. In 2012, Part D coverage goes up to $2,930 worth of drug costs, before patients’ responsibility for increased costs kicks in.

Now for the good news. Premiums paid for Medicare Part B and Part D are medical expenses, according to the IRS. If you itemize deductions, total medical expenses that exceed 7.5% of your adjusted gross income can be deducted. Therefore, you should be sure to count such outlays when you prepare your 2011 tax return.

Many Medicare enrollees don’t pay Part B premiums directly. Instead, the premiums are subtracted from Social Security checks. If you (or your parents) are in this situation, don’t forget to include the amounts subtracted when you tally your medical expenses.