where does the primary funding for medicare part a come from
Part A's inpatient admitted hospital and skilled nursing coverage is largely funded by revenue from a 2.9% payroll tax levied on employers and workers (each pay 1.45%). Until December 31, 1993, the law provided a maximum amount of compensation on which the Medicare tax could be imposed each year, in the same way that the Social Security tax works in the United States. Beginning January 1, 1994, the compensation limit was removed. Self-employed individuals must pay the entire 2.9% tax on self-employed net earnings (because they are both employee and employer), but may deduct half of the tax from the income in calculating income tax. Beginning in 2013, the rate of Part A tax on earned income exceeding US $200,000 for individuals (US $250,000 for married couples filing jointly) rose to 3.8%, in order to pay part of the cost of the subsidies mandated by the PPACA.