How Is Medicare System Funded? 
That is an excellent question ! The Medicare system is funded by two trust funds . The first , the Hospital Insurance Trust Fund , is made up of payroll taxes , Medicare A premiums from those who do n't get it free , and investment income . The second , the Supplemental Medical Insurance Trust fund is made up of Government grants , the premiums paid in forMedicare part B , and investment income . Unless the cuts to the administrative overhead and fraud recaptures are what the Affordable Care Act -LRB- Obamacare -RRB- expects them to be , because of the trust fund raiding and cuts that Congress has done over the years , the trusts are expected to go dry in 2024 . With the money captured by the ACA , the trusts are solvent to 2029 . Either way , there needs to be a change , as nearly 10,000 Americans become eligible for Medicare benefits every day , and the trusts are too depleted to support the costs . Thanks for asking ! 