Medicare

Payroll taxes paid by employers and employees on earnings — Part A is funded through the Medicare payroll tax — a percentage of earnings withheld from workers and matched by employers — deposited into the Hospital Insurance Trust Fund. That funding structure is why eligibility for premium-free Part A is tied to a person's (or their spouse's) history of Medicare-covered employment measured in quarters of coverage. Part B and Part D, by contrast, rely on beneficiary premiums and general tax revenues. This payroll-tax engine explains the credits-based eligibility rules and distinguishes Part A from the premium-funded parts of Medicare.

National insurance concept

Increased by 10% for each 12-month period she was late, and the surcharge is permanent — The Part B late-enrollment penalty is a 10% increase in the monthly premium for each full 12-month period the beneficiary was eligible for Part B but did not enroll and had no other creditable coverage. The penalty is permanent: it applies for as long as the person has Part B. Maria's 24-month delay equals two 12-month periods, so her premium is permanently increased by 20%. The penalty is added to the standard premium and does not expire after a set number of years.

National insurance concept