How are government insurers primarily funded?

Government insurers are primarily funded with taxes. This is because government insurance programs, such as Medicare or Medicaid, are typically established to provide coverage for specific populations or needs—often those that may not be adequately served by private insurance. Tax revenue is collected from the public and allocated towards these programs to ensure a steady funding source, allowing the government to provide services irrespective of individual premium payments.

In contrast, private insurers rely on premiums paid by policyholders for funding their operations and claims. Stockholders might provide capital for privately-held insurance companies, but this is not the case for government-funded entities. Dividends are payments made to shareholders from profits, which are not applicable to government insurers that do not operate for profit but rather to provide essential services funded through public financing.