“Total HI [Hospital Insurance trust fund] payroll tax income in calendar year 2021 amounted to $302.5 billion—a decrease of 0.2 percent over the amount of $303.3 billion for the preceding 12-month period. This decrease occurred primarily because of adjustments that were made for prior years during 2021.Up to 85 percent of an individual’s or couple’s OASDI [Old-Age, Survivors, and Disability Insurance] benefits may be subject to Federal income taxation if their income exceeds certain thresholds. The income tax revenue attributable to the first 50 percent of OASDI benefits is allocated to the OASI and DI trust funds. The revenue associated with the amount between 50 and 85 percent of benefits is allocated to the HI trust fund. Income from the taxation of OASDI benefits amounted to $25.0 billion in calendar year 2021.
“Another substantial source of trust fund income is interest credited from investments in government securities held by the fund. In calendar year 2021, the fund received $2.6 billion in such interest. A description of the trust fund’s investment procedures appears later in this section.
“Section 1818 of the Social Security Act provides that certain persons not otherwise eligible for HI protection may obtain coverage by enrolling in HI and paying a monthly premium. In 2021, premiums collected from such voluntary participants (or paid on their behalf by Medicaid) amounted to about $4.2 billion.”
Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.
“The major sources of revenue for the Part B account are (i) contributions of the Federal Government that the law authorizes to be appropriated and transferred from the general fund of the Treasury and (ii) premiums paid by eligible persons who voluntarily enroll. Another source of revenue is the annual fees assessed on manufacturers and importers of brand-name prescription drugs.
“Of the total Part B revenue in calendar year 2021, $111.0 billion represented premium payments by (or on behalf of) enrollees—an decrease of 0.2 percent over the amount of $111.2 billion for the preceding year.
“Government contributions matched the premiums paid for fiscal years 1967 through 1973 dollar for dollar. Beginning July 1973, disabled persons who are under age 65 and who have met certain other conditions became eligible to enroll in Medicare, and the calculation of the premium-matching government contributions was changed. The amount of government contributions corresponding to premiums paid is determined by applying a matching rate to the amount of premiums received.43 By law, a matching rate is determined for each of two groups of Part B enrollees—one for those aged 65 and older and one for the disabled. The matching rate is equal to twice the monthly actuarial rate applicable to the particular group of enrollees, minus the standard monthly premium rate, divided by the standard monthly premium rate.”
Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.
“The trust fund’s primary source of income consists of amounts appropriated to it, under permanent authority, on the basis of taxes paid by workers, their employers, and individuals with self-employment earnings, in work covered by HI [Hospital Insurance trust fund]. Included in HI are workers covered under the OASDI [Old-Age, Survivors, and Disability Insurance] program, those covered under the Railroad Retirement program, and certain Federal, State, and local employees not otherwise covered under the OASDI program.
“HI taxes are payable without limit on a covered individual’s total wages and self-employment earnings. For calendar years prior to 1994, taxes were computed on a person’s annual earnings up to a specified maximum annual amount called the maximum tax base. Table III.B2 presents the maximum tax bases for 1966–1993. Legislation enacted in 1993 removed the limit on taxable income beginning in calendar year 1994.
“Table III.B2 also shows the HI tax rates applicable in each of calendar years 1966 and later. For 2023 and thereafter, the tax rates shown are the rates scheduled in current law. As indicated in the footnote to the table, in 2013 and later employees and self-employed individuals pay an additional HI tax of 0.9 percent on their earnings above certain thresholds.”
Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.
Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.
Page last updated Jan. 27, 2023 by Doug McVay, Editor.
