Settling an injury case is not as easy as it once was. In the old days, cases would be settled with little or no consideration being given to satisfying liens and protecting an injured person’s right to receive post-settlement Medicare and Medicaid benefits. Rather than attorney neglect, much of this was due to weak and sometimes non-existent lien rights and undeveloped requirements for protecting the interests of Medicare and Medicaid. Times have changed. This blog will touch on the interplay between Medicare Set-Asides (MSA) and Medicaid’s means-tested Supplemental Security Income (SSI) benefits.
According to the Centers for Medicare & Medicaid Services (CMS), a “Medicare Set-Aside Arrangement (WCMSA) is a financial agreement that allocates a portion of a … settlement to pay for future medical services related to the … injury, illness, or disease. These funds must be depleted before Medicare will pay for treatment related to the … injury, illness, or disease.” While MSAs have been part of the workers’ compensation landscape for many years, it is unclear, despite years of discussion, whether they are required in personal injury cases. In cases involving serious injuries where the plaintiff will most definitely require future medical care, caution dictates considering, at least, the creation of an MSA.
Supplemental Security Income (SSI) “is a Federal income supplement program funded by general tax revenues (not Social Security taxes):
- It is designed to help aged, blind, and disabled people, who have little or no income; and
- It provides cash to meet basic needs for food, clothing, and shelter.”
The more countable income you have, the less the SSI payment will be. Moreover, if your countable income is over the allowable limit, you cannot receive SSI benefits at all.
Money received from a settlement [of any type] can put the SSI recipient over the allowable limit. While money earmarked for an MSA is, in theory, to be used for medical care and beyond the reach of the beneficiary, it will nevertheless be viewed by the Social Security Administration as income or assets for SSI eligibility purposes.
Losing SSI because of a settlement can be avoided by creating a Special Needs Trust (SNT). An SNT is a specialized trust that allows the disabled beneficiary to enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits. The MSA must be included in the SNT to avoid losing SSI.
The issue addressed in this blog is just one of many sensitive issues that may arise in a settlement involving injuries. To avoid the pitfalls of making an uninformed decision, it is always advisable to seek the advice of competent legal counsel before signing on the dotted line.
Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.