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John Bair
John Bair
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When is a Liability Medicare Set-Aside Unnecessary?


when is an MSA necessaryIf you’re a Medicare beneficiary and your personal injury lawsuit is about to settle, you may need to act quickly to protect your benefits eligibility. For many, this means establishing a liability Medicare set-aside (LMSA). We talk a lot about Medicare set-asides – but they’re not always necessary. Below, we discuss when they’re appropriate, and when they’re not.

Back up – what is an LMSA?

There are two overarching types of MSAs: a workers’ compensation Medicare set-aside arrangement (WCMSA) and a liability Medicare set-aside (LMSA). The two are largely similar, in that they are both a financial agreement that allocates a portion of a person’s settlement to pay for future medical services related to an injury, illness, or disease. Individuals can establish a WCMSA when they are going to receive money from a workers’ compensation claim, or they will establish an LMSA when they will receive a personal injury settlement.

Do I Need to Establish an LMSA with My Settlement?

Not all settlements require a Medicare set-aside. These funds are the U.S. Centers for Medicare & Medicaid Services’ (CMS) preferred method for overcoming primary payer issues (more on that topic here), but all MSA arrangements are voluntary.

An MSA is often not recommended if the plaintiff is Medicare-eligible but none of the settlement money is meant to cover future medical care, or only past damages and wages are being recovered in the settlement. On the other hand, an MSA might be a good option to maintain eligibility if some of the settlement proceeds are intended to cover injury-related expenses.

Although these scenarios seem cut and dry, it’s still best to avoid making the final decision without professional advice. As early in the process as possible, consider consulting with a qualified settlement planner to determine whether an MSA is advisable.

If you are about to receive a liability settlement and an LMSA is the best option to comply with Medicaid, click here to read my post, “Complying with Medicare to Protect Your Insurance Coverage.”


About John Bair

John Bair has guided thousands of plaintiffs through the settlement process as co-founder of Milestone Consulting, LLC, a broad-based settlement planning and management firm. Milestone’s approach is comprehensive and future-focused. John’s team has guided thousands of clients by taking the time to understand the complexities of each case. They assess the best outcome and find the path that enables each client to manage their many needs. Read more about Milestone Consulting at http://milestoneseventh.com/.

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