Five Ways to Fund Medicare Part A

Higher taxes can help stave off the projected 2036 insolvency of Medicare's Hospital Insurance trust fund.

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There’s decent news on the Medicare front. Notably, the Hospital Insurance Trust Fund (HITF) that's used to pay Medicare Part A benefits for recipients. The HITF is expected to be solvent for longer. According to current projections from Medicare trustees, the HITF would be able to fully pay scheduled benefits until 2036, five years later than last year’s forecast. That’s because federal payroll taxes fund the HITF, and the number of covered workers who pay the taxes, and their average wages, are forecasted to be higher. The HITF is mainly funded by Medicare taxes. And currently, there are three Medicare taxes: 

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Joy Taylor
Editor, The Kiplinger Tax Letter

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to kiplinger.com and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.