Medicare is funded through payroll taxes, premiums, and general revenues. The Hospital Insurance trust fund, which finances Medicare Part A, relies on payroll taxes paid by employees and employers. Parts B and D are funded through a combination of beneficiary premiums and general revenues. , Medicaid is jointly funded by federal and state governments. The federal government provides a percentage of Medicaid expenditures to states, known as the Federal Medical Assistance Percentage, or FMAP. This percentage varies by state, ranging from 50% to 77% in 2024.
