Final answer:
The tax assessed to provide medical insurance for elderly or disabled individuals is known as Medicare. It is funded through payroll taxes on workers and has been supplemented by additional taxes introduced by the Affordable Care Act for high-income earners.
Step-by-step explanation:
The tax assessed to provide medical insurance for individuals who are elderly or disabled is known as Medicare. Established in 1965, Medicare is a federal program that offers health insurance to all individuals over age 65, as well as to certain younger people with disabilities. This program is largely funded by a payroll tax levied on workers, which is intended to support both Social Security and Medicare's hospitalization insurance. Over time, as the population of elderly Americans has grown, the financial strain on these programs has increased, posing challenges to their sustainability.
Additional funding mechanisms such as increasing the Medicare tax by 0.9% for high-income taxpayers and imposing a 3.8% tax on unearned income have been introduced through the Affordable Care Act (ACA) to help sustain Medicare. There are ongoing debates and concerns regarding the sufficiency of current funding levels and tax rates to cover the expected costs due to the growing number of elderly Americans who will be relying on these programs in the future.