History
- In 1945, President Harry S. Truman called for a national health insurance fund.
- In 1962, President Kennedy introduced a plan to create a healthcare program for older adults using their Social Security contributions, but it wasn't approved by Congress.
- In 1964, former President Lyndon Johnson called on Congress to create the program that is now Medicare.
- The program was signed into law in 1965.
More information on the evolution of the Medicare Program:
- https://understandingmymedicare.com/learn-more/history-of-medicare/
- Medicare's 50th Anniversary
- https://www.medicareresources.org/basic-medicare-information/brief-history-of-medicare/
- https://en.wikipedia.org/wiki/Medicare_(United_States)
Funding
- There are four separate trust funds. Under Social Security, the Old-Age and Survivor Insurance (OASI) Trust Fund pays retirement and survivor benefits and the Disability Insurance (DI) trust Fund pays disability benefits. These two trust funds are jointly designated as (OASDI).
- For Medicare, the Hospital Insurance (HI) Trust Fund pays for inpatient hospital and related care. The Supplemental Medical Insurance (SMI) Trust Fund is comprised of two separate accounts Part B, which pays for physician and outpatient services and Part D, which covers the prescription drug benefit that began in 2006.
|
Payroll tax rates (in percent) |
OASI |
DI |
OASDI |
HI |
TOTAL |
|
Employer – since 2009 |
5.30 |
0.90 |
6.20 |
1.45 |
7.65 |
|
Employee – 2011 only |
3.30 |
0.90 |
4.20 |
1.45 |
5.65 |
|
Combined Total |
8.60 |
1.80 |
10.40 |
2.90 |
13.30 |
Payroll taxes
- Every American worker (155 million) pays on earnings up to $106,800 (in 2011), but not all pay income taxes. For 2011 only, President Obama signed into law payroll tax relief that reduces the employee’s OASI tax rate by 2% to 4.2%. Employers will continue to pay 6.2% for a combined rate of 10.4% for OASDI. This OASDI tax disappears on earning above $106,800. Social Security taxes are supposed to fund only OASDI benefits. Basically, it’s a forced pension tax.
- The 1.45% Medicare HI tax is paid on all earnings. The self-employed are charged the equivalent of the combined employer and employee tax rates of 13.30% in 2011. In 2013, there will be an increase in the Medicare payroll tax by 0.9% on earned income in excess of $200,000 for individual taxpayers and $250,000 for married couples filing jointly. Employers do not have to match this amount.
- Income tax is different in that money goes to fund all federal programs except Medicare and Social Security. About one-third of those who file federal income tax returns end up owing no federal income tax. In contrast, the top 1% of income earners – who receive 21% of the nation’s reported income pays 30% of the federal income tax. The top 5% pay 60% and the top 50%, pay 97% of federal income tax.
Facts and Figures
Quick Facts about Medicare Plans & Protecting Your Personal Information
http://healthenroller.com/the-facts-about-medicare/
https://www.ncpssm.org/our-issues/medicare/medicare-fast-facts/
https://www.ehealthmedicare.com/about-medicare-articles/facts-about-medicare/
https://www.investmentnews.com/galleries/10-surprising-facts-about-medicare/image/1
Contact the US Federal Benefits Unit serving the country where you reside for advice. They have experience with the problems specific to people residing outside the US, and often are familiar with the specific circumstances of the country where people reside. In addition, they have direct access to the Social Security files. You can find the Federal Benefits Unit serving your location here: ssa.gov/foreign/foreign.htm