If you’ve been injured in an accident or as a result of a third party’s negligence, you have every right to pursue a personal injury case. While the generous settlements that result from successful personal injury cases offer immediate benefits and provide some assurance of financial security, they can also complicate recipients’ efforts to secure Medicaid benefits in the future.
Medicaid is a means-dependent insurance program that’s jointly administered by the federal government and the various state Medicaid agencies. It exists to provide low-income individuals with access to basic medical care at little or no out-of-pocket cost. Unlike Medicare and some other government benefit programs, Medicaid recipients are subject to strict eligibility requirements. Some of these are retroactive.
Individuals who wish to obtain Medicaid benefits can’t earn more than about $2,200 per month. This exact figure is subject to change and typically rises by 1% to 5% at the beginning of each calendar year. Additionally, recipients can’t have more than $2,000 to $3,000 in “countable assets.” The exact “countable asset” limit is dependent on the recipient’s long-term care needs and certain other factors.
Most assets are not exempt from Medicaid eligibility calculations. There are a few exceptions for “core items” that solvent individuals or couples can’t reasonably expect to live without. These may include:
• A primary residence worth up to $500,000
• An automobile
• Wedding and engagement rings
• Funeral contracts
• Certain types of life insurance
Unfortunately, personal injury settlements are considered “countable assets.”
How This Affects Medicaid Eligibility
Unstructured personal injury settlements that push potential Medicaid recipients over the “asset cap” will result in disqualification. Individuals who receive settlements during a period of Medicaid eligibility are prohibited from receiving future benefits. In order to remain eligible, those who haven’t yet applied for Medicaid eligibility often attempt to dispose of the post-cap portion of their settlements or siphon the cash into exempt assets. However, these maneuvers can be time-consuming and problematic.
After you receive a personal injury settlement, a trained attorney can help you keep your Medicaid benefits or remain eligible for future benefits. A “special needs trust” that keeps the bulk of your settlement in safekeeping is exempt from Medicaid’s strict means testing. With a special needs trust at your disposal, you can use your settlement’s funds to pay for necessary goods and services without worrying about triggering a Medicaid penalty. Since special needs trusts need to be set up properly to avoid unintended consequences, it’s best to work closely with an attorney during the settlement process.
If you’re worried that a pending personal injury settlement could complicate your eligibility for Medicaid benefits, talk to a seasoned attorney about your options. Contact the Indianapolis, IN law offices of Garrison Legal at (317) 842-8283 or visit us online.