How Does a Settlement Impact a Client’s Medicare Benefits?

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.

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.

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 Medicare benefits. 

If you’re not sure whether your client is receiving Medicare or Medicaid, or have any questions regarding client benefits when settling a case, give us a call. We’d be happy to help.

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