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How is Medicare funded?

  • September 14, 2014

Q: How is Medicare funded?

A: Medicare Part A is funded primarily by payroll taxes, which end up in the Hospital Insurance Trust Fund. Medicare Part B revenue comes from both general revenues and premiums paid by Medicare beneficiaries. Medicare Advantage (Part C) is also funded by general revenues and by beneficiary premiums, while the Medicare Part D prescription drug plan is funded by general revenues, premiums and state payments.