Which statement about Part D financing is true?

Which statement about Part D financing is true?

• A. It is funded entirely by payroll taxes
• B. It receives funding from states to defray Medicaid prescription costs
• C. It is funded solely by beneficiary premiums
• D. It has no state funding

Answer: (B)

Part D is financed through a mix rather than by a single source. Enrollees pay premiums, but federal general revenues and state payments also contribute. Specifically, states fund a portion to defray the prescription costs for individuals who are eligible for both Medicare and Medicaid (dual-eligibles). That blend of funding sources is what makes Part D workable and ensures ongoing drug coverage for those with Medicaid in addition to Medicare. So, the statement that states provide funding to help defray Medicaid prescription costs under Part D is true. Payroll taxes fund Part A, not Part D, and Part D is not financed solely by beneficiary premiums, and there is state funding for dual-eligibles, so the other descriptions aren’t accurate.

Part D is financed through a mix rather than by a single source. Enrollees pay premiums, but federal general revenues and state payments also contribute. Specifically, states fund a portion to defray the prescription costs for individuals who are eligible for both Medicare and Medicaid (dual-eligibles). That blend of funding sources is what makes Part D workable and ensures ongoing drug coverage for those with Medicaid in addition to Medicare.

So, the statement that states provide funding to help defray Medicaid prescription costs under Part D is true. Payroll taxes fund Part A, not Part D, and Part D is not financed solely by beneficiary premiums, and there is state funding for dual-eligibles, so the other descriptions aren’t accurate.