How is Medicare financed?
• Part A is primarily financed through payroll taxes; employees and employers each pay 1.45 percent of wage earnings (self-employed individuals pay 2.9 percent). Revenue from the payroll tax is held in the Hospital Insurance Trust Fund and is used to pay Part A benefits. • Part B is financed by beneficiary premiums and by federal general revenues. Premiums collected from beneficiaries cover about 25 percent of total annual costs for Part B services. • Part C is not separately financed; these plans receive payments from Medicare to provide Medicare- covered benefits, including hospital and physician services, and in most cases, prescription drug benefits. • Part D is financed through general revenues, premiums paid by Part D enrollees, and state contributions to Medicare drug costs. Question: What are some rural implications of the Medicare program? Answer: Because of the heavy dependence on Medicare revenues of most rural hospitals and health care delivery systems, Medicare has been a
• Part A is primarily financed through payroll taxes; employees and employers each pay 1.45 percent of wage earnings (self-employed individuals pay 2.9 percent). Revenue from the payroll tax is held in the Hospital Insurance Trust Fund and is used to pay Part A benefits. • Part B is financed by beneficiary premiums and by federal general revenues. Premiums collected from beneficiaries cover about 25 percent of total annual costs for Part B services. • Part C is not separately financed; these plans receive payments from Medicare to provide Medicare- covered benefits, including hospital and physician services, and in most cases, prescription drug benefits. • Part D is financed through general revenues, premiums paid by Part D enrollees, and state contributions to Medicare drug costs. Question: What are some rural implications of the Medicare program? Answer: Because of the heavy dependence on Medicare revenues of most rural hospitals and health care delivery systems, Medicare has been a
