Planning Beginner: Introduction to Medicare

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Which part of Medicare is funded by tax revenue?

Part A

Part B

Part C

Part D

Part A. Part A, which covers inpatient care, is funded by a 2.9% payroll tax. The others are funded primarily by Medicare enrollees themselves.

A Medigap policy is _______.

Designed to offer more comprehensive coverage as an alternative to original Medicare

Purchased from a private insurance company to help cover out-of-pocket expenses not covered by Medicare

Purchased from the federal government to supplement gaps in original Medicare coverage

None of the above

Purchased from a private insurance company to help cover out-of-pocket expenses not covered by Medicare. Medigap is a supplement, not an alternative to Medicare, and is not sold by the government.

When is the best time for most people to buy a Medigap policy?

During the open enrollment period, because the company must sell them a policy

When they first need Medicare-covered services, because Medigap policies are required to be sold to all Medicare enrollees

Any time before they get sick

During the open enrollment period, because the company must sell them a policy. For most people, it probably doesn't make sense to delay.

What is the income limit on which Medicare tax is paid?

The same limit that Social Security uses

Your federal tax rate

$1 million

There is no limit

There is no limit. Unlike the Social Security tax, there is no ceiling on the income on which the Medicare tax is paid.

Medicare Part C is known as Medicare Advantage, and is an alternative means of delivering the care and services provided by Medicare Parts A and B.

True

False

True. Medicare Advantage provides coverage through Medicare-approved private insurance companies.