Medicaid is a topic that comes up frequently in personal injury settlements — and for good reason, because dealing with Medicaid presents many unique challenges at the time of settlement. In this article, we will discuss the two main types of Medicaid in order to demystify when exactly a settlement may jeopardize a client’s ongoing eligibility.
If you have got a client that is on Medicaid and you are settling a personal injury case, they are going to be on one of two types of Medicaid: MAGI-based Medicaid or disability-based Medicaid.
MAGI-based Medicaid stands for Modified Adjusted Gross Income-based Medicaid and is also known as income-based Medicaid.
If you have a client on income-based Medicaid because of their very low income — and they meet all the guidelines, but are not disabled — sending them a settlement check is not going to affect their Medicaid benefits. This is because Medicaid only looks at their income for eligibility. A settlement check is considered an asset, not income.
If you have a client who is disabled and is receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), and they are on Medicaid, then they are most likely going to be on a disability-based Medicaid program. In contrast to income-based Medicaid, disability-based Medicaid is asset and income-based.
This means that if you send your client a settlement check, you will most likely put them over the asset limit for disability-based Medicaid, which could result in the client losing their eligibility for Medicaid. This is something you certainly want to avoid since many clients rely on Medicaid as their only source of health care, and because oftentimes the value to the client of Medicaid can exceed the value of the settlement itself.
Medicaid is a federally and state-funded — and state-administered — program, which means waiver programs will be unique to each state. Consequently, this means that each state will have its own set of issues to deal with. So, any time you have a client that is on Medicaid, it is always a good idea to call someone who can help you work through exactly which type of Medicaid your client is on so you can make sure the settlement doesn’t impact ongoing eligibility.
Government Benefit Assessment
In fact, our firm received such a high volume of inquiries about this topic from attorneys and settlement recipients across the country that we developed an online screening process that we allow firms to use at no — or very little — cost. We call it the Government Benefit Assessment.
The Assessment screens your clients for the types of government benefits they are receiving and then triages which benefits they are receiving. With that information, we then educate you and your clients on whether a settlement will impact the government benefits your clients are receiving.
In other words, our screening process can help you determine if a client needs further planning through a special needs trust (or some other vehicle), or if you can go ahead and send your client their settlement funds without having to worry about your client losing their Medicaid eligibility (or eligibility for other needs-based benefits).
A Resource for Questions
If you have any questions about the Government Benefit Assessment, or if you are working with a client who receives Medicaid, give us a call now. We can send you our online assessment, or we can talk through the client’s situation over the phone.