Who is Elligible for Medicare Essay

1876 Words 8 Pages
Introduction

Nearly every aspect of the United States health care system is complex; Medicare is no exception. Discovering who is eligible for Medicare, how Medicare is paid for and what benefits are covered under which part is confusing at best. Medicare has four parts: Part A, Part B, Part C and Part D. Not all of these require premium payments and different services are covered under each part. Furthermore, the financing of Medicare is difficult to understand because it is funded by several different sources. Most of the funding for Medicare comes from the following sources: payroll taxes, premiums and general revenues.

How Medicare is Financed

Medicare is financed by six separate sources of funding. The first and greatest source
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The federal government then uses these funds for many things including helping to finance Medicare. General revenues account for approximately 39% of all Medicare funding (Kaiser Family Foundation, 2009) making this funding source the second largest contributor to Medicare and nearly equal to payroll tax in contributions. The next largest contributor to Medicare funding is beneficiaries (Medicare Payment Advisory Commission, 2010 & Kaiser Family Foundation, 2009). Beneficiaries contribute to Medicare funding through premium payments, health care copays, deductibles and medication copays (Medicare Payment Advisory Commission, 2010). As of 2009, beneficiary contributions to Medicare accounted for 12% of all Medicare funding (Kaiser Family Foundation, 2009). At 12%, beneficiary contributions are less than one-third that of payroll tax contributions or general revenue contributions. Although beneficiary contributions are the third greatest source for Medicare funding, the 12% it contributes is nearly insignificant in comparison to the sources previously mentioned. Another source of funding for Medicare is state governments (Kaiser Family Foundation, 2009). State payments to Medicare usually come in the form of premium payments made by Medicaid on the beneficiary's behalf. However, some of the state contributions for Medicare funding come in the form of payments made to supplement Medicare Part D or Medicare Prescription Drug Coverage

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