Is a Lawsuit Worth It If I’m on Medicaid?

Yes, Although Medicaid will have a lien against your personal injury settlement, a lawsuit is still well worth it if you’re on Medicaid and/or Medicare!

This article will give you some information you need to know about your personal injury case and Medicaid.

If you don’t have a personal injury lawyer yet or haven’t settled your personal injury case, please call us for a free consultation. If your case is settled, keep reading below.

What Can I Do If My Personal Injury Case Is Settled and I’m on Medicaid?

If your personal injury case is settled and you deposited your settlement check in your account —

  1. You’re probably out of luck and will lose your Medicaid and other public assistance benefits.
  2. Unfortunately, we cannot help you.

If your personal injury case is settled and you gave your settlement check or settlement money to someone —

  1. You’re probably out of luck and will lose your Medicaid and other public assistance benefits.
  2. Unfortunately, we cannot help you.

If your personal injury case is settled and you received your settlement check but didn’t deposit it —

  1. Do NOT deposit your settlement check if you want to keep your Medicaid and other public assistance benefits.
  2. Call your personal injury lawyer and tell your lawyer to put your settlement money in a Special Needs Trust or a Pooled Trust because you want to keep your Medicaid and other public assistance benefits.
  3. Discuss with your personal injury lawyer which trust is better for you. Unfortunately, we are not allowed to help you because you are represented by another lawyer.

What Can I Do If My Personal Injury Case Is Not Settled and I am on Medicaid?

If your case is not settled, you want to change your lawyer, and you want us to be your new personal injury lawyer – please call us for a free consultation.

divider line - article continues below this section

call to action 196x370 1Call Founding Partner Rob Plevy right now for your free consultation!

Rob will call you back within minutes!
1-800-487-8911

Call to get your Free Consultation Right Now button

click to chat button to get your free consultation right now

No Win — No Fees
— No Expenses
GUARANTEED! ™

 

Medicaid Liens and Medicare Liens on Your Personal Injury Settlement

What Can Medicaid Lien Against My Personal Injury Settlement?

If you’re on Medicaid and/or Medicare, there may be a lien against your case. But the lien is only for money Medicaid and/or Medicare paid for the medical treatment of the injury caused by your accident.

Medicaid and/or Medicare cannot put a lien on your case for medical treatment not related to your accident.

How Much Can Medicaid Lien Against My Personal Injury Settlement?

The lien is almost always much less than the amount billed because it is paid at very low Medicaid rates and can then be reduced by 1/3.

Most of our clients’ Medicaid and Medicare liens were only a fraction of the amount we obtained for them. Many of the liens were only a few hundred dollars. In some cases, the liens were reduced to $0.

Many personal injury lawyers just pay the full amount of the liens in full. We use a company that reviews the billing to eliminate all unrelated medical charges and they have lawyers who negotiate to reduce the liens.

Since the lien is usually very small as compared to your personal injury settlement, it is well worthwhile to pursue a claim for injuries if you have Medicaid and/or Medicare.

How Can I Keep My Personal Injury Settlement If I’m on Medicaid?

A different question is, how to settle your injury case for $500,000 when you’re on Medicaid? Medicaid doesn’t allow you to have more than $15,900 in nonexempt assets in 2021.

If you settle your accident case for more than Medicaid allows you to have, there are several options allowing you to receive the money.

Option 1 — Put Your Personal Injury Settlement Money In a Trust

One option, for people under age 65, is to have the money paid to a Special Needs Trust which will protect your settlement money without interrupting your Medicaid benefits.

If you are over the age of 65, you cannot put the money into a Special Needs Trust but you can put the money into a Pooled Trust.

Note: Your Personal Injury Lawyer must put your settlement money in the trust. You CANNOT do it.

Special Needs Trusts and Pooled Trusts are recognized by the government and allow you to receive your settlement money without disqualifying you for Medicaid.

This handbook tells a trustee how to administer a Special Needs Trust and this guide from the New York City Dept. of Social Services TRUSTEE GUIDELINES FOR ADMINISTRATION OF A SUPPLEMENTAL NEEDS TRUST

What Can I Buy With My Trust Money?

With a Special Needs Trust, you can pay for almost anything you want directly from the trust. You can use your trust money to pay for clothing, restaurants, a TV, vacation, car (up to $30,000), etc.

You can’t use trust money to pay for any medical treatment which Medicaid would pay for but you can pay for dental or medical treatment not covered by Medicaid such as elective plastic surgery.

You can’t use trust money to pay for anything that any public benefits would pay for. For instance, if you receive SSI or live in Section 8 housing you cannot use your trust money to pay for housing.

How Can I Spend My Personal Injury Settlement Money From a Trust?

A Special Needs Trust costs approximately $3,000 to set up. If your money is in a Special Needs Trust, you will name a trustee to manage the trust and file a tax return for the trust. The trustee can be someone you know or you can get a professional trustee. A bank may have a  professional trustee.

You can use a credit card, debit card, or check to pay from a Special Needs Trust.

A Pooled Trust costs approximately $500 to set up. You do not need to manage the trust or file a tax return for the trust because a Pooled Trust is managed by a professional trustee.

To spend your money from a Pooled Trust, you can use a credit card but not a debit card. You can send the credit card statement to the trustee who will pay the credit card. You can also pay for an item and send the receipt or invoice to the trustee. The trustee will only pay for allowed items and services.

Can I Break The Trust If I Want My Personal Injury Settlement Money Out of The Trust?

break through the insurance policy glass ceilingProbably not. There are some rare exceptions when you can take the money out of the trust.

Option 2 — Get Off Medicaid and Purchase Health Insurance

If the settlement is large enough, you can decide to get off Medicaid and purchase health insurance. The cost of buying health insurance is probably around $1,000 plus per month.

When your trust money runs out, you can reapply for Medicaid.

Option 3 — Get Off Medicaid and Get a Job With Health Insurance Benefits

The best option is to get a job with health insurance benefits.

Costco is a great employer that pays well and gives a pension with health insurance, eye care, and dental to full-time AND part-time employees.

Option 4 — Get Health Insurance From Your Spouse

If your spouse has a job or can get a job that gives health insurance with family coverage, you can get off Medicaid and get health insurance from your spouse’s plan.

Option 5 — Spend Your Personal Injury Settlement Money

You can spend the money in the month you receive it and lose your benefits for a month.

Will My Personal Injury Settlement Money Affect My Medicare Benefits?

No. Medicare is not affected by your receiving settlement money unless you need Medicare to pay for future medical treatment for your injuries. If you do, proper planning will protect your Medicare benefits.

More FAQs

divider line gold - thick

1-800-HURT-911® Personal Injury Lawyers "As Seen On TV" ABC, CBS, NBC, FOX, , WOR, WPIX logos

Get the 1-800-HUR-T911® Dream Team™ on your side and become a member of our family!

“Knowing I had a team of great lawyers on my side gave me a sense of power and peace of mind. They took care of everything for me. When a settlement was negotiated, I saw the difference a team of lawyers makes.”
—Lia Fisse

No Win — No Fee — No Expenses — Guaranteed!

Personal Injury Lawyer Screened by Google

Attorneys who can get you the most amount of money AND provide personal service!

Free Personal Injury Consultation call button  Chat to get your free Personal Injury consultation right now button

Please take a look at some of our:

What will happen when I call 1-800-HURT-911 or chat?

  1. Our call center operators and chat operators are available 24/7.
  2. Just give your contact info to our operator and Founding Partner Rob Plevy, Esq. will call you within 5-10 minutes for your free, no-obligation consultation during the hours of 8 am – 10 pm. After hours, Rob will call you in the morning or at the time you want.
  3. Then just text or call us any time you want during your case!

Because any delay could cause you to lose viable rights and benefits, please call HURT-911® Founding Partner Rob Plevy, Esq. right now for a free consultation to find out your rights days/nights/weekends.
1-800-HURT-911
1-800-487-8911

You can speak, text, or email with us whenever you want throughout your case and afterward, days/nights/weekends, and experience our famous personal service. You’ll even get our personal phone numbers so you can call or text anytime!

Watch Founding Partner Phil Franckel, Esq. talk about New York Serious Injury Attorneys.com, difficult cases, and the 1-800-HURT-911® Dream Team™


Philip L. Franckel, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York; He has a 10 Avvo rating; Avvo Client’s Choice with all 5-star reviews; Avvo Top Contributor; and a former Member of the Board of Directors of the New York State Trial Lawyers Association.

1-800-HURT-911® Founding Partner and Personal Injury Lawyer Rob Plevy, Esq.

Founding Partner Rob Plevy, Esq.

Robert Plevy, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York. Rob began his legal career in 1993 as an Assistant Corporation Counsel defending The City of New York against personal injury lawsuits.

Get the HURT911® Dream Team on your side!
Call Attorneys Rob Plevy & Phil Franckel days/nights/weekends for a free consultation
1-800-HURT-911

1-800-487-8911

New York Serious Injury Lawyer logo

divider line gold - thick