Medicare Part A – Coverage for hospitalization, care in skilled nursing facilities, select home health care services, and hospice care falls under Part A. This is predominantly funded through a payroll tax of 2.9%—split evenly between employees and employers (1.45% each).
Medicare Part B – This part covers visits to the doctor, outpatient procedures, preventive health services, and additional home health care. The primary sources of finances for Part B are the federal budget’s general revenues and contributions from the beneficiaries (25%, plus an additional interest of 2%). Those with incomes exceeding $85,000 per single person or $170,000 for a married couple are levied with an increased premium.
Medicare Part C – Through the Medicare Advantage program, Medicare compensates private insurance companies a set monthly fee for each member that they cover.
Medicare Part D – Outpatient medication prescriptions are mainly supported by general federal funds (74%) and contributions from beneficiaries (15%), along with a further 11% contributed by the states. Similar to Part B, Part D costs are escalated for enrollees with higher income.
