Final answer:
The tax withheld from an employee's paycheck to pay for medical bills after retirement is the Medicare portion of the FICA taxes.
Step-by-step explanation:
The tax that is withheld from an employee's paycheck to pay for medical bills after retirement is Medicare. This tax, along with Social Security, is part of the Federal Insurance Contributions Act (FICA) taxes. Employees see 1.45% of their gross annual income deducted for Medicare from their paychecks. Both the employer and employee contribute to this fund, which then provides healthcare benefits to the elderly after retirement.