Does a Personal Injury Settlement Affect Medicaid?

If you are a Medicaid recipient who has been injured due to the negligence of another party, you may be entitled to a personal injury settlement. However, many individuals are hesitant to pursue a settlement because they are concerned about how it will affect their Medicaid benefits eligibility. In this blog post, we will explore the relationship between personal injury settlements and Medicaid.

Medicaid is a federal and state-funded program that provides healthcare coverage for individuals with limited income and resources. In order to be eligible for Medicaid, you must meet certain income and asset requirements. If you receive a personal injury settlement, it is important to understand how it may affect your Medicaid eligibility and benefits.

If you or a loved one was injured and is concerned about the impacts of a personal injury settlement, we encourage you to read through the following article to learn more about the process and schedule a free consultation with experienced personal injury settlement attorney Mark Hurt to learn about your options for protecting Medicaid benefits eligibility.

Can a Tennessee Personal Injury Settlement Compromise Medicaid Eligibility?

In general, a personal injury settlement will not automatically disqualify an individual from Medicaid. However, the settlement funds may be classified as income or resources, which could impact eligibility.

For example, if an injury victim receives a lump sum settlement payment, it may be counted as income for the month in which it is received. This could potentially push the person’s income above the Medicaid eligibility threshold for that month, which could result in the loss of Medicaid benefits for that month.

If you are currently receiving Medicaid and are seeking compensation through a personal injury lawsuit, it is critical to speak with a personal injury attorney experienced in Medicaid law relating to personal injury settlements and awards to understand how such compensation may affect your continued ability to receive Medicaid.

Is Medicaid Entitled to Recover Funds From a Personal Injury Settlement?

In some cases, Medicaid may have a right to recover some or all of the settlement funds through a lien or subrogation. This means that Medicaid may be entitled to a portion of the settlement to reimburse the program for the cost of medical care related to an injury.

Medicaid liens and subrogation rights vary by state, and the specific rules and procedures can be complex. In general, if Medicaid has a lien or subrogation right, the program must be notified of the settlement and provided with an opportunity to assert its claim.

If Medicaid asserts a lien or subrogation claim, it is important to work with an experienced personal injury attorney who can negotiate with Medicaid to minimize the amount of the claim. In some cases, it may be possible to negotiate a reduced repayment amount or to have the lien waived altogether.

What Is a Structured Settlement?

One way to minimize the impact of a personal injury settlement on Medicaid is to structure the settlement payments over time. A structured settlement is an arrangement in which the settlement funds are paid out over a period of time rather than as a lump sum.

Structured settlements can help to avoid the income and resource problems associated with lump sum settlements. If the structured settlement payments are spread out over a period of time, they will not be considered income for the month in which they are received, and they may not be considered as resources for future months. This may help you maintain your Medicaid eligibility and benefits.

In addition, structured settlements may also help to minimize Medicaid liens and subrogation claims. If the settlement funds are paid over time, Medicaid may not be entitled to a lien or subrogation claim for the entire settlement amount. This can result in a lower repayment amount and can help an individual keep more of their settlement funds.

It is important to note that structured settlements may not be appropriate in every case. As an experienced personal injury attorney with over two decades of experience, firm-founding attorney Mark Hurt can discuss the facts of your case and help determine whether a structured settlement may be right for you.

A Special Needs Trust May Be Used to Hold Funds For a Personal Injury Settlement to Retain Medicaid Eligibility In Tennessee.

If a structured settlement will not alleviate Medicaid eligibility concerns, a special needs trust may be a viable alternative to retain benefit eligibility. A special needs trust, also known as a supplemental needs trust, is a legal arrangement that allows funds to be held for the benefit of a person with disabilities while preserving their eligibility for means-tested government benefits, such as Medicaid. In Tennessee, a special needs trust can be used to hold funds from a personal injury settlement to help retain Medicaid eligibility.

The following are the steps involved in creating a special needs trust:

• Set up a special needs trust. A special needs trust can be established by a person with a disability, their parent, grandparent, legal guardian, or a court. The trust must be established in accordance with state and federal law and must be designated specifically as a “special needs trust.”

• Fund the trust with settlement funds. Once the special needs trust is established, the settlement funds can be transferred to the trust. The trust must be the legal owner of the funds, not the beneficiary.

• A trustee manages the funds. A trustee, who is named in the trust document, is responsible for managing the trust assets and using them for the beneficiary’s benefit. The trustee has discretion to use the funds to pay for goods and services that are not covered by Medicaid, such as education, travel, entertainment, and other expenses that enhance the beneficiary’s quality of life.

• Funds are not counted as income or assets for Medicaid purposes. Funds held in a special needs trust are not counted as income or assets for Medicaid eligibility purposes. This means that the beneficiary can continue to receive Medicaid benefits, even though they have funds held in trust.

It is important to note that a special needs trust must be established and funded correctly to be effective. If the trust is not established correctly, or if the funds are not managed properly, it could result in a loss of Medicaid eligibility.

Are There Different Types of Special Needs Trusts in Tennessee?

Yes, there are different types of special needs trusts in Tennessee that are established for the benefit of individuals with disabilities. The following are some of the most common types of special needs trusts in Tennessee:

• First-Party or Self-Settled Special Needs Trust. This type of trust is established with the assets of the person with disabilities. The trust is used to preserve the assets and ensure they are not counted as a resource for purposes of qualifying for government benefits like Medicaid and Supplemental Security Income (SSI).

• Third-Party Special Needs Trust. This type of trust is established by a third party, such as a family member or friend, for the benefit of the person with disabilities. The assets are not considered to be the beneficiary’s assets and, therefore, will not impact their eligibility for government benefits.

• Pooled Trusts. Pooled trusts are managed by non-profit organizations that pool the assets of many beneficiaries with disabilities to create a larger investment pool. Each beneficiary has their own sub-account within the larger trust, and the trust assets are used to provide for their needs while preserving their eligibility for government benefits.

It is vital to note that each type of special needs trust has its own specific requirements and rules, making it essential to work with an experienced attorney to determine which type of trust is appropriate for your situation.

Schedule A Free Consultation With Experienced Tennessee Medicaid Eligibility Attorney Mark Hurt.

A personal injury settlement can potentially affect your Medicaid eligibility and benefits. If you receive a lump sum settlement, it may be considered as income or resources, which could impact your Medicaid eligibility. If you remain eligible for Medicaid, the settlement funds may impact the benefits awarded. In addition, Medicaid may have a lien or subrogation right to recover some or all of the settlement funds. This can be complex and may require the assistance of an experienced personal injury attorney to negotiate with Medicaid and minimize the repayment amount.

If you are a Medicaid recipient who has been injured due to the negligence of another party, it is important to work with an experienced Tennessee personal injury attorney who understands the relationship between personal injury settlements and Medicaid.

At The Law Offices of Mark T. Hurt, we help injured victims retain Medicaid eligibility to the extent possible through the use of structured settlements and special needs trusts.

If you or a loved one was injured and is concerned about retaining Medicaid or other vital government benefits, we invite you to call our offices to schedule a free consultation with experienced Medicaid eligibility lawyer Mark Hurt. Mark can listen to the facts of your case and help navigate the complex rules and procedures to ensure that you receive the maximum compensation while minimizing the impact on your Medicaid eligibility and benefits to the extent posssible.