EMERGENCY: Help Seniors Affected by Hurricane Matthew. Donate Now


AARP Staying Sharp: Keep Your Brain Healthy


The tablet with free 24/7 customer support. Learn More


Military and Veterans Discount



AARP Games - Play Now!

AARP Books

Medicare for Dummies book cover

Get the answers you need, from Patricia Barry, AARP's Ask Ms. Medicare

Share Your Thoughts

Reader stories help us fine-tune our education efforts and strengthen our calls for action on issues that matter most to you. We read and learn from every story and may use yours (with permission) to brief legislators, inspire other readers and more. Please share your story with us. Do

You've Earned a Say

The Future of Medicare: 15 Proposals You Should Know About

Pros and cons of options on the table in Washington

6. Generate New Revenue by Increasing the Payroll Tax Rate

The primary source of funding for Medicare hospital services (Part A) comes from the payroll tax. Workers and their employers each contribute 1.45 percent of earnings for a total contribution of 2.9 percent. Medicare also offers coverage for physician services (Part B) and prescription drugs (Part D), but these services are not funded by the payroll tax. It's estimated that beginning in 2024 Medicare will not have enough money to pay for all of the expected hospital expenses. Increasing the payroll tax rate by 0.5 percent to 3.9 percent (or to 1.95 percent each for workers and employers) would raise additional revenue for Medicare’s inpatient hospital expenses. For an individual earning about $50,000 a year in wages, this increase would amount to an extra $250 in Medicare payroll taxes per year.

PRO: The Affordable Care Act health reform legislation includes important measures that promise to slow the growth of spending under Medicare hospital insurance (Part A). However, even with these cost-control measures, Medicare hospital insurance faces a small long-term deficit. That gap can, and should, be closed by a modest increase in payroll taxes. In addition, some changes in benefits are in order to improve protections against extended or repeated hospitalizations. There is no reason to perpetuate the myth that Medicare hospital insurance is in crisis. It isn’t. Vigorous enforcement of the health care law together with this modest tax increase will secure hospital insurance for current and future Medicare beneficiaries. (Henry J. Aaron, Brookings Institution)

CON: Addressing Medicare’s long-term financial problems by raising payroll taxes on working Americans is not the answer. Doing so will make the situation worse for the economy and for our children and grandchildren, and it will erode the political will to undertake needed reforms. We need to make sure that programs like Medicare don’t take such a large share of the economy in the future that there is not enough for other critical goals like education, rebuilding our roads and bridges, and defending America. We’ve got to get the future costs of Medicare down, not tax Americans more. (Stuart Butler, Heritage Foundation)


Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Walgreens 1 discount membership aarp

Members can earn 50 points per $1 spent on select health & wellness products at Walgreens.

member benefit aarp hear usa

Members save 15% on easy listening devices and more at the HearUSA Hearing Shop.

Eye Med 4 Membership Benefit AARP Discount

Members save up to 60% on eye exams and 30% on glasses at Target Optical.

Membership Benefits Discounts Email Genius

Brain boost? Get AARP email for access to memory exercises & more that help you focus.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points