In today’s blog, I’ll introduce you to some things you should know if you have a personal injury claim and you receive benefits from Medicaid.
Many people who have gone through the personal injury claims process breathe a sigh of relief when the claim settles.
They figure the case is over, but that’s not the whole story – especially if you receive Medicaid. So what are the concerns? Let’s dive in.
One thing I often tell clients is that getting the money from the insurance company is really only half the battle. The other half is keeping as much of that money in your pocket as we possibly can, while also making sure that you have continued access to all the benefits that you had before your personal injury claim.
Medicaid and Personal Injury Claims
When your case settles, you may think “I don’t have to go to court and soon enough I’ll have some money in my pocket to make life easier.” What you may not know, though, is that if you receive a personal injury settlement and you also have public benefits such as Medicaid or other means-tested benefits, you could see your settlement money dwindle very fast or even worse, you could lose access to these benefits like Medicaid if you don’t plan properly.
By means-tested, we are talking about benefits such as Medicaid and certain other public benefits that look at your income and your assets to determine whether or not you’re eligible for that benefit.
Too much income or too many assets may make you ineligible.
Repaying your Medicaid Lien
The first thing you should know is that if Medicaid paid any money for medical care for your injury then Medicaid is going to expect to be paid back. That’s what we call a lien or a right of recovery.
Every state has its own version of this law but, generally speaking, they all say the same thing. The social services agency that paid your benefits has the right to be reimbursed from any portion of your personal injury settlement that’s meant to compensate you for the cost of injury-related medical care.
Outlining Medical Expenses for Medicaid
In a personal injury settlement, there’s no line item for medical care, lost income, or pain and suffering. Usually, you sign a release and the insurance company sends a check.
So what do you do under these circumstances?
Well, if you have a lawyer, it’s your lawyer’s job to figure out what the best thing to do is in that particular situation.
For instance, one common approach is to look at how much you received in settlement versus how much your case is worth based on what we call a full value. That is, if you got every dollar you should have, what would the case be worth?. Many cases don’t settle for that amount, but something less (for a variety of reasons usually having to do with evidence). In that case, there’s an argument to be made that Medicaid should accept less too.
Finding Additional Available Insurance Beyond Medicaid
Another thing your lawyer can do is analyze the bills themselves and make sure that there isn’t another insurance company that should properly have paid for the medical care such as your no-fault insurance company. No-fault doesn’t have to be paid back, whereas Medicaid does.
In the most extreme cases, you may have to have a hearing in front of a judge to decide how much of your settlement needs to be paid over to Medicaid for those medical expenses that they paid for.
The most important thing to remember here is this: If you have Medicaid and you have a personal injury claim, you and your lawyer (if you have one) should be discussing this as early as possible in your relationship. What you don’t want is to get a settlement check and then be surprised when a Medicaid lien comes up or interferes with your benefits. That’s something nobody wants.
Keeping Medicaid Benefits After Your Settlement
The second thing that you’ll need to concern yourself with is how to keep your Medicaid benefits after you receive your settlement. As I said earlier, Medicaid is a means-tested benefit meaning you can’t have too much income or too many assets or you’ll lose eligibility.
And if all of a sudden you have a large check from a personal injury settlement, that can wreak havoc on your ongoing eligibility, especially if you rely on Medicaid for expensive medical care or prescriptions.
And that’s where something called Medicaid planning comes into place.
There are certain things that you can do, typically with the help of specialized lawyers, to preserve both the settlement money and your eligibility for Medicaid. This commonly includes things like looking at exempt assets – assets that aren’t counted against you when calculating your Medicaid eligibility.
In some cases you can transfer money to a spouse or you might be able to create something called a special needs trust. To gain a true understanding of what each of these tools does and how they might apply to your situation is beyond the scope of this article. But it’s important that you understand that you must consider Medicaid early and plan for it if you’re expecting to have a personal injury settlement.
And waiting until you have the money in hand may be too late.
Summary: Settling a personal injury claim while on Medicaid
There are three main things I’d like you to take away from today’s blog:
- Number one: if you have Medicaid and you have a personal injury settlement, you can expect that Medicaid will want to be paid back for any amounts it spent on your injury-related medical care.
- Number two: if you have a settlement that’s large enough and puts you over the income or asset limit, you’ll need to do some specialized Medicaid planning in order to preserve those benefits.
- And third: most of this Medicaid planning and benefits preservation must be done with the help of a lawyer. If you don’t have a trusted lawyer already, start looking for somebody that you can speak to as soon as possible if you have a personal injury claim.
This is just a short introduction to Medicaid and personal injury claims. I hope you found today’s article helpful. If you want the advice of an experienced Vermont accident lawyer, call Drew Palcsik at Champlain Valley Law.