Long Term Care Certification Practice Test

Primary funding for Medicare Part A is provided through which of the following?

1. Portion of FICA taxes

2. Individual income taxes

3. Estate taxes

4. Sales taxes

The correct answer is: Portion of FICA taxes

Primary funding for Medicare Part A comes from a portion of Federal Insurance Contributions Act (FICA) taxes, which are specifically collected from employees and employers to support social insurance programs, including Social Security and Medicare. The FICA tax is divided into two parts: one that funds Social Security and another that funds Medicare. By design, the revenue collected through these payroll taxes is directly allocated to the Medicare Hospital Insurance Trust Fund, which is responsible for funding hospital services and skilled nursing facility care for seniors and certain individuals with disabilities. This system ensures that the program is primarily funded through contributions from the workforce, which then provides coverage to individuals when they reach retirement age or qualify due to disability. The other options, such as individual income taxes, estate taxes, and sales taxes, do not specifically fund Medicare Part A. While individual income taxes contribute to the general fund of the federal budget, which can support various programs, they are not earmarked specifically for Medicare. Similarly, estate taxes and sales taxes do not have a direct role in funding Medicare, reflecting the targeted nature of FICA taxes in supporting this specific healthcare program for seniors.