Trust Fund Solvency
Annual Report of the Board of Trustees
The Medicare program is composed of two parts. Hospital Insurance (HI), or Medicare Part A, helps pay for hospital, home health, skilled nursing facility, and hospice care for the aged and disabled. Supplementary Medical Insurance (SMI), or Medicare Part B, pays for physician, outpatient hospital, home health, and other services for the aged and disabled. The HI trust fund is financed primarily by payroll taxes paid by workers and employers. The taxes paid each year are used mainly to pay benefits for current beneficiaries. The SMI trust fund is financed primarily by transfers from the general fund of the U.S. Treasury…
