I recently visited the US Army Heritage Museum in Carlisle for the first time. The highlight was the outdoor walking tour featuring military equipment, encampments and fortifications across the various wars in US history.
I saw up close an M4 Sherman tank, the most famous tank of all time and the workhorse weapon instrumental to the victory in the European theatre of World War II.
The M4 Sherman tank was chiefly designed and championed by General Jacob Devers, the forgotten four-star general and one of the most accomplished military officers in the nation’s history – who hailed from York.
The story of his dogged efforts to overcome bureaucracy, egos, stale tactical doctrine and Army turf wars to create the M4 tank is one of the great untold successes of WW2.
As the head of the Army’s Chief of Armored Services in 1941, Devers presciently saw the need for a radical new tank design featuring speed, reliability and a powerful gun mounted on a rotating turret, all to better challenge the formidable German Panzer tanks on the battlefield.
Devers’s M4 tank design delivered the goods. He was involved in all facets of the design process and negotiated directly with the CEOs of the major automobile manufacturers to mass produce them.
It’s no stretch to state that without Devers, there would have been no M4 Sherman tank — and without it, the Allied victory in WWII would have been costlier and less certain.
Equally important, Devers radically re-organized the Army’s outdated battle formations to incorporate tanks, artillery and mechanized infantry into one cohesive, flexible fighting unit. This new fighting doctrine was a decisive factor in the victory in Europe and Devers is considered the father of modern American armored warfare.
This is the tip of the iceberg of Dever’s military biography. It’s a travesty that he’s not a household name in US history books; at a minimum he should have an armored vehicle named after him.
Making the right Medicare choices is not as difficult as designing a new tank but it’s still complicated and there are land mines to sidestep.
Since health is your first wealth, smart Medicare planning is the bedrock of a good retirement plan. The growing volume of our clients turning 65 has forced us to develop an expertise in Medicare and we harbor strong opinions about the best Medicare choices – read on.
Created in 1965, Medicare is the national health insurance program for seniors (defined as age 65 and older).
Traditional Medicare has several moving parts. Part-A is hospital coverage and is “free” once you earn forty coverage credits, which equates to working ten years.
Part-B is medical coverage – doctor, tests, services - and there’s a monthly cost. For 2025, the annual Part-B is $185 per month, heading to $206 per month in 2026.
Part D is prescription drug coverage. Introduced in 2006, Part-D is bolted onto Medicare by purchasing a drug plan from a third-party insurer. Starting in 2025, there’s a $2,000 annual out-of-pocket cap for drug costs, so Part-D plan premiums have spiked.
To fill several holes in traditional Medicare coverage, you purchase a “Medigap” supplemental policy to pay for deductibles and out-of-pocket medical costs.
Therefore, option #1 is choosing traditional Medicare with a Medigap and Part-D drug plan.
Option #2 is Medicare Advantage, which is also known as Medicare Part-C. First introduced in 1999, Advantage plans feel familiar since they look like traditional employer-sponsored group health insurance.
Medicare Advantage is essentially the old HMO model: the government pays insurers a fixed annual amount per enrollee, and the company decides how to ration care.
With Advantage, Part-D drug benefits are built into the insurance plan and the insured still pays the Part-B premium. The curb appeal is the flexible choice of benefits and even tempting no-premium plan options.
So, which Medicare path is best for you? In our view, in almost all cases, the best long-term choice is traditional Medicare/Medigap. Here’s why:
- Medicare is universally accepted by doctors and hospitals around the country without network restrictions;
- Reasonable Medigap premiums;
- Low out-of-pocket costs;
- No referrals or pre-approvals required to receive medical care.
Contrast these benefits with Advantage plans, which maintain strict regional networks that restrict geographic access to medical care and often require pre-approval by the carrier.
Advantage plans market free premium plans, free gym membership and hearing aid discounts. Even Joe Namath pitches Advantage plans that reimburse a portion of your Part B premium — have you seen that odd commercial?
Our biggest concern is the long-term viability of Advantage, coupled with the fact that after the first year you’re subject to medical underwriting to switch back to traditional Medicare.
That gamble could backfire in a long retirement if your health were to seriously decline.
We’re hearing stories from clients dealing with rationed care by Advantage and about doctors declining some Advantage plans. Moreover, some rural communities are losing access to Advantage plans due to the lack of viable networks and poor reimbursement rates.
Losing your Advantage plan access in ten years is no big deal – if you’re healthy. If not, you could be declined by traditional Medicare and then what?
Here are a few more Medicare pointers:
- Medigap Plan-G offers the best mix of benefits / costs among the Medigap policy options. A G-plan will cost $150-200 per month these days.
- For the healthy, a High-Deductible-G plan adds a reasonable (about $2,800 in 2025) annual deductible with a meaningful premium reduction. Note that medical underwriting is likely to switch from Plan-G to HD-G and vice versa in the future.
- You can “kick the tires” with Advantage for the first enrollment year then switch back to traditional Medicare in the second year without underwriting. If healthy, why not enroll in Advantage at first with a no-premium (or return of premium) plan and pocket the first-year savings?
In closing, our advice is to tune out the marketing noise and stick with traditional Medicare. It’s the more reliable, cost-effective path for long-term health coverage.
Until next time, be well…Tim