Purpose of Medicare
As it is currently prescribed, Medicare has two parts and each part has its own set of rules. Part A governs the provisions under which acute care in hospitals is rendered and also allows limited coverage for skilled nursing care, home care and hospice care. Part B governs all of the coverages and limitations dealing with physicians, usually outpatient, all types of diagnostic tests, and all medical treatment.
Part A is paid by employer and employee contributions. Part B is paid by general tax revenues from the United States federal income tax in the amount of 75%. The remaining 25% portion is paid in the form of a set monthly Medicare premium paid by the eligible participants.