Which statement accurately describes Medicare according to the material?

• A. It covers hospital and medical insurance for senior citizens funded by a general tax revenue.
• B. It covers hospital and medical insurance for senior citizens funded by a Federal employment tax over the working life of the retiree.
• C. It is a private plan that varies by state.
• D. It provides only private hospital coverage.

Answer: (B)

Medicare is funded through payroll taxes collected during a person’s working years (the Medicare portion of FICA/SECA), with those funds supporting hospital insurance and, to some extent, medical insurance for people 65 and older. The idea is that retirement benefits are financed by the taxes you and your employer pay while you work, rather than by general tax revenue or private plans. That’s why this statement is the best choice: it captures the way Medicare is financed as a federal program tied to employment taxes over the working life of the retiree. The other descriptions misstate how Medicare is funded or its nature—it's not funded mainly by general taxes, it's not a private plan varying by state, and it provides more than just private hospital coverage.