Receiving a personal injury settlement or workers' compensation award is meant to bring peace of mind and financial stability—but what happens when future medical expenses arise? For Medicare beneficiaries, failing to plan ahead can lead to denied claims, out-of-pocket costs, or even jeopardized Medicare eligibility. A Medicare Set-Aside (MSA) account is the key to ensuring your injury-related medical expenses are covered while staying compliant with Medicare regulations. At Vick Law, we help injured individuals protect their financial and health future by creating customized MSAs tailored to their needs. Don’t let confusion or lack of preparation cost you the security you’ve worked so hard to secure.
What Is a Medicare Set-Aside Account?
An MSA is a designated account established to pay for future injury-related medical expenses that Medicare would otherwise cover. These accounts are typically created for individuals who have received a settlement in a personal injury case or workers' compensation claim. The funds in an MSA can only be used for Medicare-covered services related to the injury, ensuring that Medicare remains the payer of last resort.
Why MSAs Are Important for Medicare Beneficiaries
If someone is on Medicare and receives a settlement for an injury, they might assume Medicare will pay their future medical bills related to that injury. However, without an MSA, Medicare may deny coverage for those specific costs, potentially leaving individuals responsible for significant expenses. Establishing an MSA protects beneficiaries from losing their Medicare coverage or unexpected out-of-pocket costs.
Who Needs a Medicare Set-Aside?
Not everyone who receives a settlement needs an MSA. An MSA is usually recommended in cases where the injured person is a Medicare beneficiary or expects to enroll in Medicare within 30 months of the settlement. For example:
- Workers' compensation claims: MSAs are often necessary in these cases because future medical costs related to work injuries are likely.
- Sizeable personal injury settlements: If the settlement amount is substantial, an MSA can prevent Medicare from being billed for injury-related expenses, keeping the beneficiary compliant with Medicare requirements.
An MSA helps avoid potential legal and financial complications with Medicare.
How MSAs Work in Personal Injury and Workers' Compensation Cases
In a personal injury or workers' compensation case, a portion of the settlement funds is allocated to cover future medical expenses. This amount is in the MSA, and funds must be used according to Medicare’s guidelines. These funds are usually invested, and payments are made only when the injured person needs medical care related to their injury. Medicare is then billed only after the MSA funds have been exhausted.
An MSA usually requires professional management to ensure compliance with Medicare rules. Annual reporting to Medicare might be necessary to track expenditures and demonstrate that funds are being used appropriately.
Avoid Penalties and Protect Medicare Benefits
Planning for the future of your medical and financial security doesn’t have to be overwhelming. A Medicare Set-Aside account ensures your settlement works as intended—covering injury-related medical expenses while keeping your Medicare benefits intact. At Vick Law, we are experienced in guiding clients through the MSA process, ensuring compliance with Medicare rules and providing the peace of mind you deserve. Contact us today to learn how we can help you establish an MSA, protect your settlement, and safeguard your future. Don’t leave your health or finances to chance—let’s create a plan that works for you.
Key Takeaways
- Ensure compliance with federal regulations: MSAs prevent issues by covering future medication-related medical expenses without risking Medicare coverage.
- Workers' compensation and large injury settlements often require MSAs: These cases commonly need MSAs to manage injury-related expenses that Medicare won’t cover if funds aren’t correctly set aside.
- MSAs protect Medicare beneficiaries from unexpected expenses: Setting up an MSA prevents Medicare from denying coverage for injury-related costs, keeping beneficiaries safe from out-of-pocket bills.
- Professional management may be required for MSAs: Proper management helps beneficiaries comply with Medicare’s reporting requirements and ensures that funds are used correctly.
Reference: Special Needs Answers (Nov. 28, 2023) “What Is a Medicare Set-Aside and When Do You Need One?”
