What is Medicare?
This "What is Medicare?" Webinar was presented by Adamsson Associates LLC,
(which is Not affiliated with, or endorsed by, any government agency,)
in 2025, when the Monthly Part B Base premium for
2026 was projected to be $206. It ended up being $202.90.
Transcript of Video Chapter One - What is Medicare?
What is Medicare? In the early 1960s, when some of us were born, there was no coverage for our medical bills, not from the government anyway, no federal insurance for our medical care. What is Medicare? No one knew.
And then in 1965, LBJ said, "Let there be Medicare." And it was so. Original Medicare covered the land. Part A for hospital bills, part B for doctor's bills. The government would pay 80% of a qualified hospital cost, the same for a doctor's bill, 80%.
Transcript of Video Chapter Two - Medicare Supplement Plans Began
And while 80% is a nice number, it did mean that having Medicare alone could leave you exposed to paying hundreds, if not thousands of dollars for your health coverage. And so Medicare supplements were born. You might know them by their nicknames, Medsup or Medigap. A Medicare supplement insurance policy can help cover Medicare approved deductibles, co- insurance, co-ayments, and even the excess doctor charges that Medicare does not cover. These were the very first insurance companies that saw a win-win opportunity to make some money. You paid them a few pennies. They returned your pennies with dollars if you needed them. But if you never needed their dollars, they still got to keep your pennies. Spending our pennies to buy someone else's dollars, that's insurance in a nutshell, is it not?
Transcript of Video Chapter Three - Medicare Advantage Plans Began
But still, there was no federal health insurance for dental, vision, hearing, or even prescription drugs. So, in 1997, you're not going to believe this kids, but in 1997, something called the Balanced Budget Act was passed by a Republican Congress and then signed by a Democratic president. Yes, Bill Clinton, who said, "Let there be Medicare plus choice." And it was so.
Now, Medicare Plus Choice is what we now call Medicare Advantage plans or part C. Medicare Advantage plans are one-year contracts with the federal government and are administered by insurance companies to provide coverage to Medicare beneficiaries like you. Medicare Advantage plans must cover all the services that original Medicare covers. They may also, however, have some additional benefits beyond original Medicare for those who qualify. Each Medicare Advantage plan can charge different out-ofpocket costs and have different rules for obtaining services such as required referrals for specialists or utilizing only doctors and hospitals in the plan network. Rules can change each year and they do. So, if a 65-year-old American citizen chose to cover their hospital bills with Medicare Plus Choice instead of their original Medicare Part A, they were effectively choosing to say goodbye to original Medicare Part A. And in choosing to cover their doctor's bills with Medicare Plus Choice instead of their original Medicare Part B, then they would be choosing to say goodbye to original Medicare Part B. Now, they still would have to pay the part B premium to the government because only those eligible for both parts A and part B can get part C, even if part C is replacing them. But why why would someone say goodbye to original Medicare? Early Medicare Advantage plans often used surplus Medicare payments, and yes, there were surpluses back then to provide extra benefits like prescription drug coverage, vision and dental care, fitness programs.
Transcript of Video Chapter Four - Medicare Part D Plans Began
And still, there was no prescription drug coverage for those Americans of Medicare age for whom original Medicare and a Medicare supplement were working just fine. The folks with original Medicare and a Medicare supplement made a request, we'd like to add some prescription drug coverage, but only if we want to, as an optional supplement to our Medicare supplement. So, in 2006, with the signing into law of the Medicare Prescription Drug Improvement and Modernization Act of 2003, George W. Bush said, "Let there be part D." And so it was not underwritten by the government, but by insurance companies. Insurance companies brought their dollars anywhere an American Medicare age citizen wanted to spend their pennies. And despite the popularity of Medicare Advantage plans, Medicare supplements, also known as medigap policies and standalone Part D plans, are still around today.
Transcript of Video Chapter Five - How Much Does Medicare Cost?
So let's pause the story time, the history lesson right here because I know what you're thinking. "Well, I have a Medicare Advantage plan. If I did want to return to original Medicare and get a Part D policy, what's this going to cost me?"
Now, if by that question you're asking about premium, well, that I can help you with in a ballpark kind of way. As you know, part A was paid for through payroll taxes accumulated over 40 quarters of employment in a lifetime. Thank you for your service, base part B premium in 2026 will be $26 a month. I say base because it is based on income. Americans with a higher income will pay more than $26 on a sliding scale and it will be based on their tax return from two years ago. Part B premium is paid to the government directly, not the insurance company. And it is necessary to have both part A and part B to be eligible for either a supplement or an advantage plan. Here is the average monthly part D premium currently. And as long as you are paying your part B premium to the government, there are ballpark monthly premiums that people pay uh to get a Medicare supplement. That premium for the supplement is paid to the insurance company and not the government. And it does change as in it does go up as all things do.
Transcript of Video Chapter Six - Choosing a Medicare Supplement
So while the government standardizes all Medicare supplements so that a medigap plan is a medigap plan is a medigap plan, the insurance companies that offer them all have different costs of doing business and thus premiums will vary on the exact same supplement. Now, for your information, our criteria here at Adams and Associates when narrowing the list of companies uh on your behalf to consider for a Medicare supplement are the following. How long has the company been underwriting supplements? We like to see 25 years. What is their financial rating? We like to see A or above, no minus. And we like to use a company that has two versions of the same supplement, one with a high deductible and one with a low to no deductible. And we tend to stick with plan G or F plans if the client is eligible. And now for the sake of comparison, let's take a closer look at what distinguishes a Medicare Advantage plan from a Medicare supplement. Medicare supplement insurance policies are guaranteed renewable for life as long as premiums are paid on time and there is no material misrepresentation on the application. And there are no networks. Medicare supplement insurance policies allow seniors to choose any doctor, hospital or specialist that accepts Medicare. There are no networks. Medicare supplement insurance policies are good coast to coast, sea to shining sea, any zip code, anywhere. Now, co- insurance deductibles and other out-of- pocket expenses, they have to be paid by a Medicare Advantage member because there are no supplements that can be owned alongside a Medicare Advantage plan. That would be illegal. You simply can't have both.
Transcript of Video Chapter Seven - Choosing An Advantage Plan
Unlike original Medicare, Advantage plans change every year. They are very network oriented for the purposes of care coordination, which you might know and appreciate. Although steep, the out-ofpocket maximums do provide a senior with a not to exceed number every year, a ceiling, so to speak, of $9,500 to $14,000 on the high side in some parts of the country. Some include part D coverage. Actually, most do, but some don't. No matter what you pay in premium to the insurance company, you still have to pay the government the part B premium. These advantage plans and supplements, too, for that matter, are only available to folks who have both Medicare Part A and Part B. Advantage plans contractually must do everything part A and part B would do, plus maybe a few extras like routine dental, vision, hearing care, maybe a little chiropractic coverage or acupuncture, spending money for over-the-counter items, anything that they can think of to compete with the other insurance companies who also want your business. It's a competitive, dynamic way to do Medicare. While Medicare Advantage plans are controlled by the government, they are driven by consumers. And because there are so many different types of consumers, there are all those different types of advantage plans. You might be the kind of consumer that loves the annual changes in benefits and provider networks, you uh are excited to introduce yourself to a whole new company perhaps or you might be getting tired of the annual reviews and the wondering if your doctor is still in network next year. One more thing, if you choose a Medicare Advantage plan, you are not allowed to have a standalone Part D plan because Part D is usually baked into Part C plans, as is preventive, dental, vision, hearing. So, let's take a closer look at Part D. As I said before, the first Part D plans began in 2006. They're optional, but there is also a penalty for not having one. They're often included with a Medicare Advantage plan, but not always.
Transcript of Video Chapter Eight - Medicare Prescription Drug Plans
Consumers who prefer a supplement over an advantage plan shop and choose a standalone prescription drug plan. No over-the-counter costs are covered. Not all prescription drugs are covered equally. A Medicare Advantage plan member has no choice in part D coverage, but by comparison, a Medicare supplement member, as I said before, is free to shop and compare to find a plan that best fits their prescriptions and even their pharmacy perhaps. So, when would the freedom to choose a Part D plan be to someone's advantage? I'm going to have you pause the video here and just see if maybe you can't find yourself in this list.
Transcript of Video Chapter Nine - Medicare Questions
So, we return to the question, how much is it going to cost to have this insurance? Or might I ask, how much is it going to cost to not have it? How much money can you afford to lose to an unplanned illness or injury this year? Isn't that the real question? And what if it happens again in the next plan year? Getting old can be very expensive and we tend to underestimate the cost of our health care on an annual basis. I think because we really don't want to think about it. But Fidelity points out that this $345,000 number doesn't include long-term care costs that seven out of 10 of us are going to incur. No dental either, vision or hearing is in this number or prescription drugs for that matter. When those are figured in, that $345,000 estimate can easily double. And so again, it begs the question, how much money can I afford to lose to an unplanned illness or injury? I can tell you that whatever the premium is, it's a fixed cost. Now, I'm not saying it's never going to go up. It certainly will. Everything does. But at least you can plan, you can budget. And I have medigap clients that tell me that yeah, the premiums are not cheap, but they hardly ever get a bill.
REQUIRED DISCLOSURES