Now is the time to look at the fundamental changes needed for the long- term. Then, the number of Medicare beneficiaries will increase much faster than the number of workers supporting Medicare through payroll taxes. Today, four workers pay taxes to support each Medicare beneficiary. Part A coverage is earned during your working lifetime, like Social Security. It helps pay for costs of hospitalization and skilled nursing, hospice, and home health care.
Half is paid by current workers on their earnings, which is matched by employers.
This shortfall was made up by drawing down the assets in the HI Trust Fund. If expenses keep increasing faster than the income supporting Medicare, the Trust Fund will be exhausted in a little over 10 years. Part B covers most doctor, lab tests and other outpatient charges. But the premiums cover only about a quarter of every dollar spent for these services. The other 75 cents come from general tax revenues.