“Is my Medicare coverage protected or am I going to lose it? Do I have to do a Medicare Set Aside?”
When discussions about worker’s compensation or liability settlements are heating up, I’m frequently asked this basic question by many of our clients, whether they are on Social Security or not. Of course, the question may be basic, but, as is often the case, the answer is slightly more complicated.
At the end of your Social Security statement, there’s a statement that reads: “Medicare, a separate program run by the Centers for Medicare & Medicaid Services, helps pay for inpatient hospital care, nursing care, doctors’ fees, drugs, and other medical services and supplies to people age 65 and older, as well as to people who have been receiving Social Security disability benefits for two years or more.” You can get your Social Security Statement here.
What your statement doesn’t mention is that, by law Medicare is considered a secondary payor. This means that in worker’s compensation or liability cases, Medicare doesn’t pay for your medical expenses until the culpable party pays for a percentage of the necessary care. In order to ensure that Medicare’s interests are protected (as set forth by the Medicare Secondary Payor Act), your settlement may require a Medicare Set Aside (MSA).
A Medicare Set Aside (MSA) is an amount of money that you and your attorneys, or an independent 3rd party expert, determines is sufficient to protect your future Medicare benefits. This term is used in Centers for Medicare Services (CMS) memorandum only, not regulation or law, and it basically refers to a process of determining what the government’s, or the Medicare Trust Fund’s interest is in your lawsuit or claim. It’s important to note that there are no regulations regarding liability cases.
Essentially, an MSA is a voluntary arrangement that demonstrates a good-faith effort to fund your future care without relying solely on Medicare. By establishing an MSA, you are signaling to CMS that you are exercising due diligence in your settlement and not trying to extract undue funds from the Medicare system. This will protect your Medicare rights and ultimately ensure that your settlement is as beneficial to your future as possible. Remember, establishing an MSA is not mandatory, nor is submitting your proposal to CMS. See their recent guide here. Documenting how you and your attorney have adequately considered the governments interest is strongly recommended.
Your future medical coverage is important, and evaluating your eligibility for Medicare and taking appropriate steps to protect your Medicare in the settlement process is an important step in resolution.
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).