When You Should Consider a Medicare Set Aside for a Client

HomeGovernment Benefits PlanningWhen You Should Consider a Medicare Set Aside for a Client

What Is a Medicare Set Aside?

Personal injury attorneys often ask us: “Do I need to set up an MSA for my client?” An MSA or a Medicare Set Aside is an account set up for a client that is on or will soon be on Medicare. It will be used as a deductible for any injury-related expenses that Medicare otherwise would cover for that client in the future.

A common cause of confusion about MSAs is whether they’re necessary or not in certain cases. As a general rule, an MSA is not required by law in a liability situation. However, that doesn’t mean that you don’t need to consider Medicare’s future interest in the settlement.

The Importance of Educating Your Client

Attorneys always need to consider Medicare’s interests going forward if the client is on Medicare or will soon be entitled to Medicare. But that doesn’t mean you need to set up a Medicare Set Aside account. It is more important to educate your client first regarding their duties to Medicare.

It could be as simple as documenting that you have discussed with the client the possibility that Medicare might ask them to pay for injury-related care out of their settlement proceeds in the future before Medicare covers any other expenses.

The worst-case scenario is that the client tries to receive future injury-related care, but Medicare does not cover those expenses because of the settlement funds that they received.

If a client is denied Medicare coverage in the future because of a settlement you procured for them, they will probably circle back to you as the plaintiff attorney wondering why you didn’t inform them about the need to set some of the money aside to pay for future injury-related care.

There are certain cases where you will want to set up a Medicare Set Aside account because it’s a catastrophic case with large future medical needs and prescription costs. Each case is unique and needs to be evaluated separately.

If you are unsure how to handle a client’s settlement in relation to their Medicare benefits, give us a call, we can guide you through the criteria; help you think through what’s the best situation for each client; protect your client’s Medicare eligibility; protect your firm from liabilities, and just make sure that there’s a plan in place that will be a good fit for that client.

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