If you have been hurt or injured but receive Medicare, settlements have certain legal requirements that must be met in order to keep your benefits. These requirements can be technical and are best dealt with by an attorney that has experience. The following article lays out how Medicare can affect injury settlements.
Medicare is a government-provided health insurance program designed to assist certain people with hospital care, medical costs, and other expenses. Qualifying beneficiaries are people who are 65 or older, those younger than age 65 with certain disabilities, and people of all ages with permanent kidney failure.
If you were injured and receive Medicare to help cover related medical expenses, you have probably already been informed of the delicate nature of your eligibility. At Milestone Consulting, we know how stressful it can be for beneficiaries who aren’t sure how to comply with Medicare. Below are a few basic guidelines about Medicare compliance and some options people have to maintain eligibility after receiving an injury settlement.
When is Medicare a “Secondary Payer”?
There are laws in place that protect Medicare’s interests when a person has been injured and has insurance coverage in addition to Medicare. The additional insurance companies might include:
- Liability insurance (including self-insurance),
- Group health plan insurance,
- No-fault insurance,
- Workers’ compensation (if applicable), and/or
- Those held liable for the victim’s injuries.
Also known as payers, these companies are legally responsible for paying first for medical expenses related to the injury before Medicare pays. If that payment does not cover the full cost of services, Medicare may then become a “secondary payer” responsible for the balance of payment.
Medicare beneficiaries risk a denial of coverage for future medical expenses if the Centers for Medicare and Medicaid Services (CMS) determines that Medicare’s interests have not been appropriately considered.
How Do Beneficiaries Comply After Receiving an Injury Settlement?
A Medicare set-aside (MSA) is one way to protect Medicare’s interests and ensure much needed insurance coverage is not negatively affected. In short, an MSA is a voluntary arrangement that demonstrates a good-faith effort to fund future care without relying solely on Medicare. Establishing an MSA is not mandatory, but it adequately protects Medicare’s interests while ensuring a person’s settlement is as beneficial to his or her future as possible.
The process to establish an MSA is complex. Bank accounts must be established, health care providers must be notified, and claims must be properly paid and recorded. Taking a streamlined, systematic approach to the MSA process will ensure beneficiaries set up their program properly and do not lose Medicare eligibility.
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 Medicare eligibility. Money gifted to a special needs trust doesn’t count towards an individual’s assets or income, so it won’t interfere with other benefits.
There are different types of special needs trusts, but each type enables a disabled individual to receive settlement proceeds while maintaining government benefits eligibility.
Questions? Get Help from a Professional
By taking a logical approach to Medicare compliance, injured individuals can be assured they are complying with secondary payer laws and that coverage for their future medical needs will be protected. However, each beneficiary’s situation is different and must be reviewed as such. If you are receiving Medicare benefits and are about to reach settlement, we would be happy to answer your questions about compliance.
Article by John Bair