Self-employed individuals, including qualifying sole proprietors, partners, and more-than-2% S corporation shareholder-employees, can deduct premiums paid for qualified health insurance (within limits) in computing their adjusted gross incomes (AGI).
There had been some confusion concerning whether certain Medicare premiums counted for this rule. Recent IRS guidance indicates that premiums for all parts of Medicare (A, B, C, and D) count as qualified health insurance. In addition, premiums paid for the self-employed person’s spouse and dependents can also qualify.