Final answer:
The statement about Medicare's funding is true, with payroll contributions financed by employees, employers, and self-employed individuals. These funds are used to provide health care benefits under Medicare Part A, which covers hospital charges, as part of the social insurance system.
Step-by-step explanation:
The statement that Medicare is financed through separate payroll contributions paid for by employees, employers, and self-employed persons, with proceeds deposited into the Federal Hospital Insurance Trust Fund is true. Medicare Part A pays for some hospital charges and is funded by payroll deductions with matching contributions from employers. Employees pay a Medicare tax of 1.45% of their earnings, which the employer matches. Additionally, payroll taxes fund the Social Security program, with both employer and employee contributing equally.
Medicare faces similar challenges as Social Security, with an increasing number of beneficiaries due to demographic shifts. Moreover, the rising costs of healthcare are a concern for Medicare's long-term sustainability. The program is a vital part of the social insurance framework, providing health care benefits to the elderly and certain disabled individuals.