Final answer:
Medicare usually pays 80% of the amounts listed on the Medicare fee schedule for services after the deductible has been met, leaving beneficiaries to cover the remaining 20%. The program's different parts are funded through various methods, including payroll taxes and premiums, and are facing financial challenges due to rising healthcare costs and demographics.
Step-by-step explanation:
Medicare publishes the Medicare fee schedule, which sets forth the amounts Medicare agrees to pay for various medical services and procedures. Traditionally, Medicare pays 80% of the amounts indicated for covered healthcare services after the beneficiary has met their deductible, and beneficiaries are responsible for the remaining 20% either out-of-pocket or through supplementary insurance. This is known as the coinsurance. Medicare has multiple parts including Part A for hospital insurance, Part B for medical insurance, and Part D for prescription drug coverage. These parts are funded through different means, such as payroll taxes, beneficiary premiums, and general revenues. Moreover, Medicare Advantage (or Part C) is an alternative that combines Part A and Part B and often includes Part D coverage, funded through the Hospital Insurance and Supplementary Medical Insurance trust funds. With increased healthcare costs and demographic shifts, it's projected that Medicare spending will rise substantially, prompting discussions on how to sustain the program financially.