Arkansas Life and Health Insurance Practice Exam

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What are the sources of funding for Medicare Part B benefits?

  1. Combination of taxes and premium dollars

  2. Entirely by premiums

  3. Only by taxes

  4. State funds

The correct answer is: Combination of taxes and premium dollars

Medicare Part B benefits are funded by a combination of taxes and premium dollars. This means that both taxpayers and individuals enrolled in Medicare Part B pay into the system to fund the benefits provided. This structure helps ensure the financial sustainability of the Medicare program. Options B, C, and D are incorrect because Medicare Part B is not funded entirely by premiums, only by taxes, or by state funds alone. Instead, it is a shared responsibility between taxes and premium contributions from beneficiaries.

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