Medicare Part A (hospital insurance) is financed primarily by:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Part A is funded through the Medicare payroll tax — a percentage of earnings withheld from workers and matched by employers — deposited into the Hospital Insurance Trust Fund. That funding structure is why eligibility for premium-free Part A is tied to a person's (or their spouse's) history of Medicare-covered employment measured in quarters of coverage. Part B and Part D, by contrast, rely on beneficiary premiums and general tax revenues. This payroll-tax engine explains the credits-based eligibility rules and distinguishes Part A from the premium-funded parts of Medicare.
Why the other options are wrong
- B) General revenues fund a share of Part B and Part D, but Part A's primary engine is the payroll tax trust fund, so this answer understates the dedicated funding source.
- C) Beneficiaries may pay Part A premiums when they lack work credits, but voluntary contributions do not finance the program, so this answer confuses individual buy-in with program funding.
- D) Medicare Advantage plan premiums are the beneficiary's share of private coverage, not the funding source of Part A itself, so this option names a distribution channel rather than a funding source.
Memory hook
Part A rides on payroll taxes — work years of Medicare-covered jobs earn the premium-free hospital card.