Making the Most of Medicare, and the Bull Turns 3

Summary

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

Date: October 18, 2025
Host: Robert Brokamp
Guest: Richard Chan (Founder & CEO of CoverRight)

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Episode Overview

This episode tackles two major personal finance topics: a three-year retrospective on the current bull market in stocks, and a deep dive into Medicare during the annual open enrollment period. Host Robert Brokamp is joined by Richard Chan of CoverRight, who clarifies essential Medicare concepts, common pitfalls, and practical advice for making the best Medicare choices for 2026. The episode closes with actionable guidance on life insurance needs.

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Key Discussion Points & Insights

1. The Bull Market Turns Three

(00:05 – 03:28)

• Milestone: The current bull market, beginning October 12, 2022, reaches its third year.
• Market Performance (Total return over three years as of Oct 15, 2025):
  • S&P 500: 90%
  • Nasdaq: 118%
  • Dow Jones: 60%
  • International stocks: 79%
  • Russell 2000: 52%
• Asset Surges: Gold +150%, Silver +178%, Bitcoin +478%
• Value Stocks: Still historically cheap compared to large-cap US growth stocks.
• Memorable Quote:
  "The current bull market turned three years old... Over the past three years, the S&P 500 has posted a total return of 90%, while the Nasdaq has soared 118%"
  (Robert Brokamp, 00:16)

2. Auto Industry Watch

(03:28 – 03:59)

• New Car Average Price: Now above $50,000; sub-$20,000 new cars have disappeared.
• Financing Trends:
  • Average down payment: $6,020 (lowest since 2021)
  • 19.1% of buyers have $1,000+ monthly payments
  • Over 20% of loans are for 7+ years
• Delinquencies: Subprime auto loan delinquencies near all-time highs (over 6% 60+ days late).
• Takeaway: Americans taking on riskier, longer-term auto debt amid high prices and rates.

3. Toll Scam Alert

(00:05 – 03:28)

• Scam Losses: Over $1 billion stolen in toll scam texts over three years.
• Volume: 330,000 scam texts in a single day last month; 350% monthly volume increase since Jan 2024.
• Scam Tactics: Messages impersonate EZPass, link to phishing sites for credit card/bank info.
• Actionable Advice: "Never click on a link in a text or email asking for money."
  (Robert Brokamp, 03:17)

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Deep Dive: Understanding Medicare (with Richard Chan)

(03:59 – 12:48)

A. Medicare Basics

(04:29 – 05:43)

• What is Medicare?
  "Medicare is the federal health insurance program for people who are over the age of 65 in the US...for most people, it is a mandatory transition."
  (Richard Chan, 04:40)
• Transition Risks: Failing to sign up on time leads to “late enrollment penalties” – up to 10% premium increase for every year missed, lasting for life.

B. What Medicare Covers (and Doesn't)

(05:00 – 06:35)

• Coverage:

  • "Medically necessary" services — doctor visits, hospital care.
  • Excludes routine dental, vision, and long-term care.

• Supplemental Private Plans: Some private (Medicare Advantage) plans expand benefits to include dental/vision.

• Memorable Quote:
  “Medicare as a program generally will cover what they consider in quotes, medically necessary services...it won't cover things like routine dental, routine vision, at least not in the basic program.”
  (Richard Chan, 05:43)

C. Key Steps As You Approach 65

(06:44 – 07:58)

• Medicare Isn’t Free: Monthly premiums apply (varies by income, can be triple for high earners).
• Enrollment Windows Critical:
  • Start considering Medicare 6 months before age 65.
  • Your current work coverage may not exempt you from late penalties.
• Premiums Based on Income from Two Years Prior.
  "If you are going to apply for Medicare at age 65, you have to start thinking about really at 63."
  (Robert Brokamp, 07:42)

D. 2026 Open Enrollment & Government Shutdown Risks

(08:02 – 09:11)

• Medicare Open Enrollment: Oct 15 – Dec 7, 2025.
• Impact of Federal Shutdown:
  • Program itself continues, but only “critical services.”
  • 50% of Medicare staff might be furloughed. Expect slower responses for direct inquiries and new sign-ups.

E. 2026 Medicare Market Changes

(09:11 – 10:13)

• Rising Costs:
  • Medicare Advantage: Insurers dropping plans, changing benefits, market consolidation.
  • Medicare Supplement (“Medigap”): Double-digit percentage premium increases are “not uncommon.”
• Action Step:
  "All in all a decent amount of change which warrants people making sure that they're looking at their benefits and seeing that ever covers what they need for 2026."
  (Richard Chan, 09:56)

F. How to Make the Best Medicare Choice

(10:13 – 11:30)

• Review Your Annual Notice of Change: Arrives each September, spells out plan changes or discontinuations for next year.

• Check Provider Networks: Doctors/hospitals may change which plans they accept.

• Get Help:

  • State Health Insurance Assistance Program (SHIP)
  • Licensed agents/brokers (like CoverRight)

• Quote:
  "First and very most important one is review your annual notice of change."
  (Richard Chan, 10:33)

G. Evaluating Help: SHIP vs. Agents

(11:30 – 12:28)

• SHIP: Volunteer-based, offers general info but not always expert on specific insurance options.

• Licensed Agents/Brokers:

  • Licensed/certified to understand plan details, especially for complex drug or specialty needs.
  • More in-depth advice for selecting and enrolling in the right coverage.

• Quote:
  “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...”
  (Richard Chan, 12:28)

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Notable Quotes & Memorable Moments

• Brokamp on the Bull Market:
  "The current bull market turned three years old...The S&P 500 has posted a total return of 90%." (00:16)

• Chan on Enrollment Penalties:
  "If you miss your window to sign up...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." (05:08)

• Medicare's Complexity:
  "When you turn 65, there is a premium you need to pay unless you have low income assistance...for some high income earners, depending on your bracket, it's as much as three times the standard rate." (06:51)

• Annual Change Awareness:
  "Review your annual notice of change...it may be the one that says your plan isn't renewing." (10:33)

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Additional Segment: Life Insurance Needs

(13:21 – End)

• Who Needs Life Insurance?
  • "You generally only need it if someone is relying on your income."
• Coverage Rules of Thumb:
  • 10x your income (+ $150k–$200k per college-aged child)
  • Or 15x your income (to replace income indefinitely at 5% returns)
  • Online calculators can help refine the amount.
• Recommendation: Re-evaluate your life insurance coverage to ensure your family is financially protected.

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Resources Mentioned

• Medicare.gov: Official plan and comparison tool.
• State Health Insurance Assistance Program (SHIP): Free, unbiased resource.
• CoverRight: Licensed agent-broker support for Medicare choices.

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Final Thoughts

This episode combines a sharp overview of recent financial trends with a thorough, practical guide to Medicare decisions facing retirees. Key advice: start Medicare planning early, read annual plan notices, verify provider networks, and seek professional help if needed. Also, reassess life insurance based on evolving family needs.

"Fool on, everybody."
(Robert Brokamp, End)

Transcript

[Richard Chan]

Foreign.

[Robert Brokamp]

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 Motley fool money. I'm Robert Brockamp and this week I speak with Richard Chan of COVID 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 S&P 500 reached a low of 3,577 on October 12, 2022, and then the current bull market began. Over the past three years, the S&P 500 has posted a total return of 90%, while the Nasdaq has soared 118%, according to wide charts as of October 15. But not all stocks have done quite as well. The Dow Jones Industrial Average posted a total return of 60 international stocks 79% and the Russell 2,052%. This partially explains why value stocks, international stocks and small cap stocks are historically cheap, at least relative to US Large cap growth stocks. Oh, and 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 Kelley Blue Book tells us that the average price of a new Automobile in the US 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, Edmunds 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 or more accounted for 19.1% of all financed new car 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 two of the factors that 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 text 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 EZPass 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. Texts usually come from foreign gangs remotely operating so called sim farms in the US Included in the text is a link to a site where the victims are instructed to enter 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 that not to do it as well. Up next, what you need to know about Medicare when Motley Fool Money continues.

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[Robert Brokamp]

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 getting from their employers. Here to explain the basics and where to get help with your Medicare decisions is Richard Chan, founder and CEO of COVID Right and full disclosure. Motley Fool Ventures is an investor in Cover Right. Right. Richard, welcome to the show.

[Richard Chan]

Thanks, Robert. Thanks for having me. Excited to be here.

[Robert Brokamp]

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?

[Richard Chan]

Yeah, no problem. So Medicare is the federal health insurance program for people who are over the age of 65 in the US 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.

[Robert Brokamp]

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.

[Richard Chan]

Yeah, that's right. There's a lot of things that people aren't aware of. There's something called late enrollment penalties. And so generally if you miss your window to sign up and you, 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.

[Robert Brokamp]

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?

[Richard Chan]

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 into 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 Medicare, 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.

[Robert Brokamp]

Right. So obviously key is deciding what you need and making sure you're getting all the coverage for the services you need. Another thing that is generally not covered by Medicare is long term care, correct?

[Richard Chan]

That's correct. Medicare doesn't cover long term care and in many cases doesn't really cover assisted living or any or of the costs associated with that.

[Robert Brokamp]

All right, so let's say someone is getting close to 65, right. They're within shouting distance of applying for Medicare. What do they need to know?

[Richard Chan]

Yeah, the first is Medicare is not free. I think a lot of people understand that there's an amount taken 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 income 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 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.

[Robert Brokamp]

And when you talk about having to pay higher premiums, that is based on your income from two years prior. So if you are going to apply for Medicare at age 65, you have to start thinking about really at 63. That'll be the income that determines. Determines your premiums.

[Richard Chan]

Yep, exactly right. It's based on your income from two years ago.

[Robert Brokamp]

All right, so we're now in the open enrollment period started on October 15, goes for the basic version at least to December 7. And that's when beneficiaries can change their choices. So what's happening in the 2026 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, the 18th, things might have changed, but I wouldn't bet on it.

[Richard Chan]

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 at Medicare would be furloughed during this period. So as it relates to how it impacts people who are making a 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 offset, 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 getting. Get your red, white and blue card.

[Robert Brokamp]

So beyond that, what's changing for next year? And I think the bottom line really is prices are going up.

[Richard Chan]

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, 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 isn't renewing for 2026 or that there's significant changes to the benefits that they're having. Really does. 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. Even in that market we're see not uncommon double digit hikes in terms of percentage increases for premiums as well. So all in all a decent amount of change which warrants people making sure that they're looking at their benefits and seeing that ever covers what they need for 2026.

[Robert Brokamp]

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.

[Richard Chan]

Yeah, the first and very most important one is review your annual notice of change. That's a document that comes to you 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 if 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 upgrade coming 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 Cover. Right. 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.

[Robert Brokamp]

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.

[Richard Chan]

Yeah, the SHIP programs are mostly volunteers. They're not necessarily licensed, but they're capable of kind of understanding the basic 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 obviously you're calling it the federal government hotline, which again, as I mentioned earlier, are probably going to it's going to be hard to reach them probably over the coming weeks given the shutdown.

[Robert Brokamp]

So SHIP is a good source of information, but not necessarily expert advice. For real expert advice, you probably do want to turn to someone like cover, right? Or some other agent who's very familiar with the policies.

[Richard Chan]

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.

[Robert Brokamp]

Well, this has all been very good advice. Richard, thank you for joining us.

[Richard Chan]

Thanks a lot, Robert.

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[Robert Brokamp]

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 dol to $200,000 for each kid you want to put through college. Another rule of thumb is 15 times your income. This one comes from financial planner Tim Maurer, and it's based on 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 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 Bart Shannon, the engineer for this episode. As always, people on the program may have interest 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.