How Medicaid, Medicare, or Social Security Benefits May Be Affected By A Person’s Personal Injury Claim

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[Below is a transcription of the podcast]

This is Ann Margaret Perkins with Perkins Law Firm and today I’m going to be talking about whether and how a settlement can affect your Social Security, Medicare and Medicaid. The first thing you need to know is that being a Medicare or Medicaid or Social Security recipient has no effect whatsoever on your ability to make a personal injury claim, and if a person who is a Social Security or Medicaid or Medicare recipient died, it has no effect on the survivors’ ability to make a wrongful death claim. There are some benefits that can be affected by the making of that claim, and it’s important to know what those are and how they are affected.

Generally speaking, Medicare benefits are not affected by a personal injury or wrongful death settlement. One exception to that can be if you will have future medical expenses. In that case, you may have an obligation to set up a trust that will pay for those future medical expenses until that trust is depleted, after which Medicare will start paying your injury-related bills again. But that’s really the subject of a whole other podcast we don’t have time to cover here. SSD benefits are not affected by your settlement. And Social Security retirement benefits are not affected by your settlement.

The types of benefits that may be affected by a settlement are SSI benefits and Medicaid benefits. The reason those can be affected is because they are based on need. If your financial needs change from a settlement, your eligibility for those benefits may change.

How a settlement may affect your eligibility for these benefits is not something that an insurer you’re talking to is likely to know or care about. You have to educate yourself on these matters, or preferably talk with an attorney who understands them. It doesn’t matter if the settlement you received is paid by a liability insurer or an uninsured motorist insurer or paid by an individual. It is your receipt of those benefits that will affect your eligibility, not who paid them.

If you are receiving Medicaid through SSI and you settle your case and the amount you receive puts greater than $2000 -or the current what’s called “resource limit” for SSI in your bank or in your possession you’re going to lose your SSI and Medicaid eligibility for whatever period of time those resources that exceed that limit are available to you. You will lose those benefits at least for that month you settle even if you immediately spend the money. You may think that well I can live without my SSI benefit for several months because my recovery will allow me to have money to pay for my everyday needs. But you need to remember that if it affects your SSI it’s also going to affect your Medicaid. So you want to be thoughtful about how you approach a settlement because maybe you’ve got a medical procedure that you are going to need, and you’re counting on your Medicaid to pay for that. You don’t want to just let things happen. You want to take a thoughtful approach to it.

Let’s look at some examples. Say you get $10,000 in the settlement which will put you over the current resource limit for SSI; so, you’re going to lose your SSI and your Medicaid for whatever period of time you exceed the resource limit. There are some things that you may use that recovery for that are exempt and don’t count as resources. A few examples are:

• The home you live in and the land that it’s on. So if you have a mortgage you can apply your money towards a mortgage and even though that creates a benefit for you in terms of paying down your mortgage, it doesn’t count against you in terms of your eligibility.
• Burial spaces for you and your immediate family. You can prepay funeral expenses or buy burial plots.
• One vehicle, regardless of its value, if it’s used to transport you and a member of your household then that doesn’t count against you.
• You can buy a limited amount of life insurance as well as household goods and personal effects that won’t count against you.

If your recovery is large enough, you may need to establish a Special Needs Trust. These are too complicated to go into here. If you think you might need one, call us. We can help you find an attorney who specializes in creating them.

The key for you is to know what that recovery is likely to be and to spend some time planning about how you can best utilize that to your benefit and not have it harm you. We can certainly talk with you about that, and we do very carefully handle the resolution of our client’s claims when they have Medicaid or SSI, but you may also find it beneficial to talk to your local Social Security office as they can answer many of those questions as well. If you do want to talk with us our number is 770-728-6932. Or you can check out our website injuryispersonal.com. Thanks.