How is Medicare Part B primarily financed?

Medicare Part B is primarily financed through a combination of beneficiary premiums and general revenue from the federal government. Beneficiaries typically pay a monthly premium for Part B coverage, which helps cover a portion of the costs associated with outpatient care, preventive services, and some home health services. Additionally, government revenues supplement these premiums to cover the rest of the costs associated with providing Medicare Part B services. This financing structure ensures that beneficiaries have access to necessary medical services while balancing the costs between personal contributions and government support, reflecting the program's intent to be a shared responsibility.

In contrast, payroll taxes primarily fund Medicare Part A, which covers hospital insurance. Private insurance premiums do not contribute to Medicare Part B financing, as this program operates independently from private insurers. Out-of-pocket expenses, such as deductibles and copayments, do not fund Medicare directly but rather represent the costs that beneficiaries pay when accessing services. Thus, the financing mechanism for Medicare Part B distinctly incorporates both premiums paid by beneficiaries and funding from government revenues.