Which option is NOT a financing source for Part A?

Which option is NOT a financing source for Part A?

• A. Taxes levied on Social Security benefits paid to high earners
• B. Premiums for those otherwise not eligible who pay
• C. Private premiums for Medicare Advantage
• D. Reimbursement from the US Treasury general fund

Answer: (C)

Medicare Part A is funded through several specific streams that feed the hospital insurance trust fund, not through private plan premiums. Taxes on Social Security benefits paid by high earners contribute because some portion of those benefits is taxed to support Part A. Premiums paid by those who aren’t eligible for premium-free Part A also help fund the program. General revenue from the U.S. Treasury provides additional support when the trust fund needs it. Private premiums for Medicare Advantage, however, are payments for a separate, market-based program (Part C) run by private plans; they don’t finance Part A’s hospital insurance trust fund. That’s why this option isn’t a Part A financing source.

Medicare Part A is funded through several specific streams that feed the hospital insurance trust fund, not through private plan premiums. Taxes on Social Security benefits paid by high earners contribute because some portion of those benefits is taxed to support Part A. Premiums paid by those who aren’t eligible for premium-free Part A also help fund the program. General revenue from the U.S. Treasury provides additional support when the trust fund needs it. Private premiums for Medicare Advantage, however, are payments for a separate, market-based program (Part C) run by private plans; they don’t finance Part A’s hospital insurance trust fund. That’s why this option isn’t a Part A financing source.