Will You Lose Your Medicare Coverage When You Settle Your Personal Injury Case?

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Will a Settlement Affect My Medicare

A legal settlement won't affect Medicare benefits because Medicare is an entitlement benefit, not a needs-based program. However, Medicare is entitled to a portion of the compensation for any medical care you receive. Meaning you'll have to pay back Medicare before anything else is removed.

If you settled a case claiming future medical treatments, Medicare would conclude that you must now pay for your future medical treatment using that settlement and then refuse to pay you further. With the help of an attorney, though, you might be able to settle your injury claim without jeopardizing much-needed Medicare coverage.

Creating & Using a Medicare Set-Aside

Medicare has created guidelines for settlements in workers' compensation cases that will protect a claimant’s Medicare coverage after the settlement of their case. Medicare has not yet done this for third-party liability settlements.

Still, it is reasonable to believe that following Medicare’s guidelines for workers' compensation cases will also protect a claimant in a personal injury liability claim. The guidelines can be found online in a Centers for Medicare & Medicaid Services (CMS) document titled Workers Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide May 11, 2020.

In worker’s compensation cases, Medicare creates a Medicare Set-Aside (MSA), which can be used to collect a settlement without sacrificing Medicare benefits.

To use an MSA properly, you should follow these steps:

  1. Determine the cost of your future medical treatment. You can hire a company like MEDVAL or Synergy Settlement Services to prepare a Medicare Set-Aside allocation, but there are many from which to choose. You can research them independently or speak with an attorney for guidance.
  2. Take the money allocated for your future medical treatment from your settlement and place it into a Medicare Set-Aside (MSA) account. You can manage this Medicare Set-Aside (MSA) yourself by following Medicare’s guidelines or by hiring a company to manage it.
  3. Pay your injury-related medical bills from your MSA account, not any other source. If your MSA account is eventually exhausted, Medicare will continue paying the bills.

When in Doubt, Ask an Attorney

Paying for future injury-related care, otherwise covered by Medicare, out of a personal injury settlement is a developing area of the law with frequent twists and turns. You must consult an attorney about the current requirements and the best way to protect your Medicare coverage. Otherwise, you could lose those benefits and spend a significant portion of your settlement on medical care.

If you live in Laurel, Maryland, or the surrounding area, McGowan & Cecil, LLC, and our personal injury attorneys can help you navigate your case and see if you can make an MSA if a settlement is reached. We are familiar with liability law and Medicare coverage complications, so we are confident we can walk you through your case, regardless of its complexity. Our professional network of industry experts lets us connect with companies that can assist with your Medicare Set-Aside, giving you another bonus when choosing us to represent you.

Dial (301) 761-2007 to speak with a law firm member today about your case. You can also use an online contact form if you prefer. If you want to know more about the case types we manage for our clients, please click here.

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