Your Options for Receiving Medicaid Benefits After a Personal Injury Settlement
How do I Receive a Personal Injury Settlement?
If you were injured due to another person's negligence, you may be entitled to compensation from a personal injury case. If you have been injured, you will need to show that the other person owed you a duty of care that a reasonable person in similar circumstances would have been required to show. Then you would need to show that you did sustain an injury, and it was the other person's negligence that caused your injury. But what if you are also trying to qualify (or stay qualified) for Medicaid? Any personal injury settlements you may receive could possibly impact your Medicaid (and SSI) benefits.
What are some basics about Medicaid?
Medicaid is a federal health coverage program operated by states. Medicaid is an insurance program that is determined by and contingent on an individual's financial needs. Medicaid provides low-income individuals with basic medical care with minimal or no cost. Medicaid recipients do have strict eligibility requirements.
Some people have Medicaid by virtue of having SSI (Supplemental Security Income). If you are entitled to even $1.00 of SSI, you are automatically entitled to Community Medicaid. Other people do not have SSI, but have a state-specific Medicaid program that is not tied to SSI. For example, in Florida: QMB (pays for Medicare Part B premiums + copays + prescriptions); Medicaid Waiver (helps pay for home health care or ALF care); and ICP Medicaid (pays for nursing home care).
What are the Medicaid eligibility limits?
The Affordable Care Act created a new way to determine Medicaid income eligibility based on Modified Adjusted Gross Income (MAGI). Medicaid eligibility is extremely complex, and as you can see can become even more complex when you factor in a personal injury settlement. Medicaid eligibility can also vary by state. As such, you should consult an experienced attorney that specializes in Medicaid.
What Assets are Exempt from Medicaid Eligibility Calculations?
To qualify for Medicaid, applicants' assets, or resources, must be under a certain amount. However, some assets may be exempt, or not "counted" toward your asset limit. If you have assets that are not counted toward the amount to qualify for Medicaid, you can "spend down" those assets to meet the Medicaid asset limit. We recommend calculating this amount with a qualified attorney that is experienced in Medicaid spend-down. One reason is Medicaid has a look-back period to review these transfers. So, for example, if you have gifted assets or sold assets below fair market value, you may become ineligible for Medicaid.
When it comes to your personal injury claims, personal injury settlements are considered "countable assets." What this means is if you have received a personal injury settlement during your Medicaid eligibility period, you are prohibited from receiving future Medicaid benefits.
Generally speaking, the following assets are exempt from Medicaid Counting:
- Countable Liquid Assets –
- Up to $2,000 in cash, stocks, bonds, and other liquid assets for those over 65 or disabled
- Asset limits vary by state for individuals and spouses
- Primary Residence Value – a primary residence is exempt if you meet a few requirements. Speak with one of our attorneys to determine if your residence qualifies.
- Automobile – Your vehicle will qualify as long as it's used for the transportation of the applicant or a household member.
- Funds for Funeral and Burial – Speak with one of our attorneys to determine if your pre-paid funeral plan is exempt.
- Term Life Insurance Policies
- Liquid Assets in a Special Needs Trusts
Are there any Remedies to receive Medicaid after a Personal Injury Settlement?
If you still want to be eligible for Medicaid, you may want to consider moving some of your assets into exempt asset categories. Our team of attorneys can help set up a trust that will help you remain eligible for your benefits. A Special Needs Trust can help in keeping your settlement exempt from Medicaid's financial requirements. A special needs trust can allow you to use your personal injury settlement funds to pay for necessary goods and services.
What is a Special Needs Trust?
Individuals using a Special Needs Trust must meet certain criteria including:
- Establish your disability
- Show that the Special Needs Trust will provide benefits for the individual
A Special Needs Trust can be established by:
- Your individual's parent;
- Your grandparent;
- The disabled individual's legal guardian; or
- A court.
In order to qualify for the Medicaid Special Needs Trust exemption, the trust must contain specific language that if you pass away, the state will receive the remaining amounts in the trust up to the amount equal to the amount of medical assistance paid.
- Timing: You should speak with an experienced attorney to ensure that you have the proper timing with setting up a trust and applying for Medicaid.
- Disability: Can you show your disability and why you should have a Special Needs Trust?
- Specific Language: Does your trust have the required payback language required of a Special Needs Trust?
- Trustee: You should determine who you want to be a trustee. You should consider whether the individual you select as a trustee will know what they will be responsible for as a trustee and have some understanding of the implications of the trust on Medicaid or other benefits.
There are non-SNT options to consider:
Special Needs Trusts are an important tool, but its important to know that SNTs are not the ONLY tool available. Your Elder Care Attorney will discuss these options with you.
If you have received a personal injury settlement, but still want to receive your Medicaid benefits, we highly recommend working with an experienced Medicaid planning attorney. There are several specific considerations including timing, accounting, and putting together your trust.
Reach out today to schedule a consultation.