Motley Fool Money - Making the Most of Medicare, and the Bull Turns 3

Episode Date: October 18, 2025

Retirement will be an opportunity to do many things you always wanted to do. But it may also be a time when you have to do something you’ve never had to do – namely, get your own health insurance. Most retirees will get their health insurance through Medicare, which in many ways is far more complicated than the health insurance they were receiving from their employers. Robert Brokamp speaks with CoverRight CEO Richard Chan about Medicare essentials where to go to get help during the current open enrollment period. Also in this episode: -The S&P 500 is up 90% since the current bull market began in October of 2022, but some investments have done even better – while others, not quite as good-The average price of a new automobile crossed $50,000 for the first time ever, yet down payments on purchases are as low as they’ve been since 2021-Those annoying texts telling you that you owe toll-booth money? They’re a scam, and have raked in more than $1 billion over the past three years-Two rules of thumb for determining how much life insurance coverage you should have Host: Robert BrokampGuest: Richard ChanEngineer: Bart Shannon Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode Learn more about your ad choices. Visit megaphone.fm/adchoices

Making the most of Medicare, and happy three-year anniversary to the bull market. Not a much more on this Saturday personal finance edition of Motleyful Money. I'm Robert Brokamp, and this week I speak with Richard Chan of Cover Right about Medicare basics, as well as how to choose the right options for you during the current open enrollment period. But first, let's cover what happened last week in money, and we have a birthday to celebrate. The current bull market turned three years old on Monday. The SB 500 reached a low of 3,000. 577 on October 12th, 2022, and then the current bull market began. Over the past three years,

the SAB 500 has posted a total return of 90%, while the NASDAQ has soared 118%, according to Y charts as of October 15th. But not all stocks have done quite as well. The Dodgers Industrial Average posted a total return of 68%, international stocks 79%, and the Russell, 252%. This partially explains why value stocks, international stocks, and small-cap stocks are historically cheap, at least relative to U.S. large-cap growth stocks. And when, of course, we have to mention gold, silver, and Bitcoin. They are up 150%, 178%, and 478% respectively over the past three years. For our next item, let's check in on what's going on in the auto industry. After all, transportation is the second biggest item in the average American budget behind housing. A report published this past Monday by Kelly Bluebook

tells us that the average price of a new automobile in the U.S. is above $50,000 for the first time ever. Also, it's no longer possible to buy a new car for under $20,000. Earlier this month, Edmonds reported that despite the higher prices, the average down payment for a new car dropped to $6,020, the lowest level since 2021, which of course means that people are taking on larger loans than ever before. The percentage of buyers with monthly payments of $1,000 are more accounted for 19.1% of all financed new purchases near the record set last quarter, and more than one in five car loans are for seven years or longer.

Higher prices and interest rates are to the factors are likely contributing to an uptick in delinquency rates in subprime auto loans, according to Fitch, more than 6% of such loans were at least 60 days past due near an all-time high. And now for the number of the week, and it's more than $1 billion. That's the amount that has been stolen via toll scam tax over the past three years, according to a recent article in the Wall Street Journal. And you may have received one of these texts yourself. They often claim to be from EasyPass, and they say, hey, you owe us some money.

Americans reported 330,000 toll scam messages in a single day last month, an all-time high, and the average monthly volume of toll scam messages has increased 350% since January of 2024. The texts usually come from foreign gangs remotely operating so-called sim farms in the U.S., including the text as a link to a site where the victims are instructed to enter a credit card or banking info. Criminals then use the info to buy all kinds of stuff, including gift cards, clothes, cosmetics, and iPhones. The lesson, of course, is to never click on a link in a text or email asking for money. And make sure you tell your parents and kids not to do it as well. Up next, what you need to know about Medicare when Motleyful money continues.

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founder and CEO of Cover Right. And full disclosure, Motleyful Ventures, is an investor in Cover Right. Richard, welcome to the show. Thanks, Robert. Thanks for having me. Excited to be here. So many of our listeners are years, if not decades from retirement and likely have just sort of maybe a general awareness of Medicare, but probably haven't given it much thought. So let's start with the basics. What is Medicare? Yeah, no problem. So Medicare is the federal health insurance program for people who are over the age of 65 in the U.S. And so for most people, it is a mandatory transition that has to happen

at some point in their life, either at 65 or if they're working past 65 when they retire. And that mandatory part is important, right, because if you don't sign up, as soon as you're supposed to, you could pay a higher premium for the rest of your life. Yeah, that's right. There's a lot of things that people aren't aware of. There's something called late and wrong with penalties. And so generally, if you miss your window to sign up and you don't have any other sort of coverage, there are penalties up to 10% of your premium for every single year.

You could have had Medicare, but you didn't. And they are lifelong. So once you sign up, they last forever. There are sort of versions of Medicare, really two basic types. There's the original Medicare and then a more expanded version. But just very basically speaking, what does Medicare cover and what are some things that it doesn't cover? Yeah, so Medicare as a program generally will cover what they consider, in quotes, medically necessary services. So that would be, you know, things like going to the doctor, you know, if you get to an accident, going to the hospital.

But it won't cover things like routine dental, routine vision, at least not in the basic program. That's not what the Medicare program was designed for. When you think about Medicaid, it's really for critical services or necessary services. And there are now some really private plans that I think you were inferring earlier that do cover some of these routine dental and routine vision and other services that maybe the traditional program doesn't cover. Right. So obviously, key is deciding what you need and making sure you're getting all the coverage

for the services you need. And another thing that is generally not covered by Medicare, Is long-term care, correct? That's correct. Medicare doesn't cover long-term care. And in many cases, it doesn't really cover assisted living or any of the costs associated with that. All right, so let's say someone is getting close to 65, right?

They're within shouting distance, applying for Medicare. What do they need to know? Yeah, the first is Medicare is not free. I think a lot of people understand that there's an amount taking out each month. That supports the Medicare program, but when you turn 65, there is a premium that you need to pay. unless you have low-come assistance. For some high-income earners, depending on your bracket,

it's as much as three times the standard rate for someone who is on Medicare. So that's important. Number two is that there are very specific enrollment windows, so you don't want to miss them. As soon as you're about six months out of 65, whether you are intending to stay on your work insurance or not, you should proactively approach that decision around whether you are going to go into Medicare or not, really because there are,

are situations where maybe your work plan isn't considered as good as Medicare's, and so therefore you would still incur penalties for staying on that work plan. When you talk about having to pay higher premiums, that is based on your income from two years prior. So if you're going to apply for Medicare at age 65, you have to start thinking about really at 63, that'll be the income that determines your premiums. Yep, exactly right. It's based on your income from two years ago. All right, so we're now in the open enrollment period, started on October 15th, goes for the basic version at least to December 7th, and that's when beneficiaries can change their choices. So what's happening in the 26 Medicare market, starting with whether any part of this process is going to be affected by the federal government shutdown.

And I should say we're taping this on Tuesday the 14th. When you're listening to this on Saturday, 18th, things might have changed, but I wouldn't bet on it. Yeah, so that's a good question. The answer is somewhat. So Medicare itself is a mandatory program, so it is funded by existing laws, which generally means that they don't require an annual vote through Congress to continue operating. Having said that, generally what that means is only critical services are continued, and so I think the expectation is about 50% of the staff that Medicare would be furloughed during

this period. So as it relates to how it impacts people who are making decision, you can still select a plan, you can still switch, but if you try and call directly into the Medicare or the government services, obviously it's going to take longer for them to get back to you, or if you're signing up turning 65 during these couple of months, it may take longer for you to get registered and get your red, white, and blue card. So beyond that, what's changing for next year? And I think the bottom line really is, prices are going up.

Yeah, exactly. So a couple of things are happening, depending on the type of Medicare plan you're in. There is the Medicare Advantage market, which is typically the most common private plan that most people are in. A lot of fluctuations in terms of carriers changing benefits. There's people leaving markets or reducing the types of plans that are available. So we're expecting some of our customers to see notices that may tell them that their plan is it renewing for 2026 or that their significant changes to the benefits that they're having. Really, there's a lot of the insurers are trying to grapple with how to stay profitable. That's one. And then for people who are on traditional Medicare, typically they may buy something called a Medicare supplement plan,

that market, we're seeing not uncommon double-digit hikes in terms of percentage increases for premiums as well. So all in law, a decent amount of change, which warrants people making sure that they're looking at their benefits and seeing that it covers what they need for 2026. What do you recommend consumers do during this period to make the best choices for the following year? Because some people have as much as 100 options when it comes to choosing Medicare, which, again, when we're working for somebody, like you just have the plan. is offered by your employer, you might have a choice between like the PPO and the high deductible plan, but that's it. This is a completely different story. Yeah. The first and very most important one is

review your annual notice of change. That's a document that comes to in September that talks about, hey, what's happening for the next year for your plan? It may be the one that says your plan isn't renewing. With that, obviously, review and check of any of the key benefits that you care about changing. In addition to that, it's important to look and see if your providers are still working with the plan in the upcoming year. There are a lot of changes to networks, particularly over the last 18 months. There's probably been about 30 health systems that have dropped different plans across the country. Once you've done that, the next best step is really reach out to your agent, broker, or your state health insurance program, you know, someone like Coverite. We can help you navigate

what are the different benefits for 2026, go through maybe what works for you, and then select a plan that maybe makes sense for what you need. But all in all, like in short, make sure to read what's changing, make sure to get ahead of it and talk to someone if you're not sure if there's something better or there's something that's missing. There are some online resources, right? Your site is one of them. You can go to your site and get some information about different plans. Medicare.gov also has some information. And then there's also the state health insurance assistance program, ship. How does that work? Are these volunteers? Are they Medicare employees? Yeah, the ship programs are mostly volunteers. They're not necessarily licensed, but they're

capable of kind of understanding the basics of Medicare. And that's obviously different to agents and brokers like ourselves who are appointed with each of the carriers and licensed to sell those. So we go through certification and licensing. And that's different to Medicare.gov, which also you're calling to the federal government hotline, which again, as I mentioned earlier, it's going to be hard to reach them probably over the coming weeks, given the shutdown. So ship is a good source of information, but not necessarily expert advice. For real expert of advice, you probably do want to turn to someone like Hoverrider, some other agent who's very familiar with the policies.

Exactly. Yeah, there's a lot of ins and outs as it relates to drug costs, how the drugs work, maybe you've got special drugs and how to get approvals for those. And so generally, with people who are licensed to understand how each of the insurance companies work if you need those sorts of approvals, that's definitely a great channel to go through. Well, there's all been very good advice, Richard. Thank you for joining us. Thanks a lot, Robert.

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Published by Capital Client Group, Inc. Time to get it done, fools. And this week, I encourage you to give some thought to whether you have enough life insurance. It's a pretty complicated topic, but a recent Wall Street Journal article by Kimberly Lankford offered some guidance. First off, you generally only need it if someone is relying on your income. If that is the case, one rule of thumb is to buy an amount that is equal to 10 times your income.

And that one's been around for a while, and I would amend it to be 10 times your income plus $150,000 to $200,000 for each kid you want to put through college. Another rule of thumb is 15 times your income. And this one comes from financial planner Tim Maurer, and it's based in the fact that if you invest that amount and earn 5% a year, the earnings would be close to your annual income, which may be enough since household expenses will likely drop after you pass away. The journal article also points out that there are many online calculators that you can use to help come up with a more customized life insurance amount. So do a search for a few

crunch of the numbers and get additional coverage if your family would be financially devastated if you passed away. And that's it for this week. Thanks so much for listening. And thanks to Mark Shannon, the engineer for this episode. As always, people on the program may have interests in the investments they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell investments based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. I'm Robert Brokamp.

Fool on, everybody.