Last week, I explained how Medicaid, Supplemental Security Income (SSI), and other needs-based government benefits have strict eligibility requirements. When a disabled person receives the proceeds from a settlement, he or she can lose access to these benefits, which may have been covering payments for medical services, monthly income, and other necessities.
For many people, establishing a special needs trust is the answer to complying with these programs’ income-related requirements and continuing to receive benefits. A special needs trust allows a person to use a portion of the settlement proceeds for items that can enhance quality of life without compromising his or her benefits eligibility.
However, each disabled individual has his or her own setup regarding government programs and insurance coverage and must follow compliance rules for those specific programs. Patients with Medicare, for example, must adhere to a particular set of Medicare-specific rules. Below is a breakdown of these requirements.
Complying with Medicare After Settlement
The law requires Medicare beneficiaries to consider Medicare’s interests when they receive a settlement for future injury- or illness-related expenses. For decades, the government has recognized the Medicare Secondary Payer (MSP) rule, which means Medicare does not have primary payment responsibility for an injured person’s expenses when another entity has that responsibility. In other words, certain insurance coverage is first responsible for paying for medical expenses related to an injury or illness for which a person has received a settlement. If that payment does not cover the full cost of services, Medicare may then become a “secondary payer” responsible for the balance of payment. If a person receives a settlement and fails to adequately consider Medicare as a secondary payer, he or she could face denial of coverage for future medical expenses.
To protect Medicare’s interests as settlement approaches, plaintiffs often work with a settlement planner to establish a Medicare set-aside (MSA). For many, an MSA is the best way to protect Medicare’s interests and ensure coverage is not negatively impacted.
If you’re approaching settlement as a Medicare beneficiary, how do you know if an MSA is the right solution? In a previous post, I describe Milestone Consulting’s four-step approach to the MSA process to ensure injured plaintiffs do not lose Medicare eligibility.
Milestone is a comprehensive settlement planning firm vastly experienced with establishing MSAs. Feel free to contact Milestone if you or your client is about to receive a settlement and is a Medicare beneficiary. We can develop an individualized approach to ensure their is no disruption in Medicare compliance.
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/.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).