Introduction
Attorneys often ask us how a settlement check can impact a client's Medicare benefits.
Medicare is an entitlement for people who are 65 years old or for people who have been deemed disabled. The latter group will receive Medicare benefits 2 years after the date they start receiving Social Security Disability Insurance.
Since Medicare is an entitlement benefit and not a needs-based program, a client who receives legal settlement won't lose their Medicare benefits. It will not be impacted when a client receives a settlement. The client can be at ease when receiving a settlement check, knowing that their Medicare benefits will not be affected in any way.
What Are the Preparations Related to Medicare and Receiving a Settlement?
If there's a Medicare lien, it needs to be taken care of from the date of injury to the date of settlement. Not reporting any settlement resulting from any personal injury claims within 60 days can result in substantial fines—which can go as high as $1,000 per day.
If it's a case where Medicare will be paying future, injury-related medical care for a client, Medicare's future interest in the client's settlement should be considered to decide whether or not a Medicare Set Aside (MSA) account or another arrangement should be established.
You might also find our guide on Liability Medicare Set Aside helpful.
What Is the Impact of a Settlement on Medicaid?
Medicaid is a needs-based government benefit, whereas Medicare is an entitlement program. If the client is receiving Medicaid, then settlement planning is needed before sending the client a settlement check to protect their Medicaid benefits.
If you're not sure whether your client is receiving Medicare or Medicaid, or have any questions regarding client government benefits planning when settling a case, give us a call. We'd be happy to help.
