How Is Medicare System Funded?
1305 POINTSview profileNeil SteinmanOwner, Orange County Health & Life Insurance,The Medicare system is funded by deductions from your payroll. So in large part, we have all paid into the system throughout our working careers. If your spouse didn't work, he/she is eligible anyway since you contributed. If you did not contribute, you can pay for Medicare or purchase insurance through the state or federal exchanges. Note: You still have to pay $105/mo for Part B when you go onto Medicare.Answered on May 26, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is an excellent question! The Medicare system is funded by two trust funds. The first, the Hospital Insurance Trust Fund, is made up of payroll taxes, Medicare A premiums from those who don't get it free, and investment income. The second, the Supplemental Medical Insurance Trust fund is made up of Government grants, the premiums paid in for Medicare part B, and investment income. Unless the cuts to the administrative overhead and fraud recaptures are what the Affordable Care Act (Obamacare) expects them to be, because of the trust fund raiding and cuts that Congress has done over the years, the trusts are expected to go dry in 2024. With the money captured by the ACA, the trusts are solvent to 2029. Either way, there needs to be a change, as nearly 10,000 Americans become eligible for Medicare benefits every day, and the trusts are too depleted to support the costs. Thanks for asking!Answered on May 27, 2014flag this answer
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