Although the threshold for qualifying for Medicaid benefits remains strict, the program is in place to help those who can’t afford health insurance or soaring medical bills. However, the eligibility for Medicaid is based on income and dependents–so what happens if you receive Medicaid and are awarded a personal injury settlement? Legally, an accident may leave you with undue suffering and a justified need for compensation. Nonetheless, a personal injury settlement may significantly increase your assets in the eyes of the government. 

Creditors can seize your property and benefits, and based on the monetary vindication you receive after an accident; you may see your Medicaid benefits disappear. Unfortunately, a personal injury claim can impact the amount of money you receive to decrease your medical costs. This may feel like a reason to avoid pursuing a claim, but this isn’t all bad news: We’re here to help. We’ll look at current statistics related to Medicaid, the laws that impact Medicaid and personal injury settlements, and we’ll cover how to proceed with a claim if you receive Medicaid benefits.  

U.S. Medicaid and the 2020s

Medicaid has existed as a U.S. government program since 1965, and 1 in 5 Americans will use Medicaid at some point in their lifetime. Currently, over 80 million Americans are enrolled in the program. In 2020 alone, the U.S. spent $671 billion on Medicaid and CHIP (Children’s Health Insurance Program). On the program’s federal level, the income eligibility cannot exceed $2,000 per month per individual (the state requirements vary). Many people have benefited from Medicaid, but it makes sense that the government wants to ensure those who no longer need assistance don’t take advantage of the program.

How recent rulings could impact your claim

The Supreme Court recently ruled that state-run Medicaid programs can lay claim to personal injury settlements. States can seek reimbursement for Medicaid payments made to a patient who is then awarded a settlement. The Court’s decision is fairly broad as it includes money from all aspects of a claim–medical expenses plus pain and suffering: It makes it difficult for those who settle small-to-medium claims. If you receive millions in a personal injury settlement, you’re less likely to be adversely impacted by this ruling. Even if Medicaid doesn’t seek reimbursement as a result of your claim, your settlement could rescind your eligibility. 

Under the ruling, if a patient has funds from Medicaid for future medical care and is awarded their claim, the state may take part of the settlement to recoup the government funding. Before the Supreme Court weighed in, states were only able to claim past bills (and not future expenses) from paid settlements. The decision came about from a Florida case in which Medicaid demanded past and future medical payments from an $800,000 settlement for a child left in a vegetative state after a tragic accident. Professor Nora Engstrom of Stanford Law School told Bloomberg Law, “The Court’s decision absolutely will reduce litigants’ incentives to bring personal injury lawsuits. Damages are the fuel that powers the tort system. Without fuel, the system can’t run.”

Should you wait to file your claim?

One option you may have is to wait to file your personal injury claim. Consult an attorney to discern what damages you’re entitled to, and carefully weigh your options. If you receive Medicaid, your funding from the program may stop. However, you may discover that a settlement will still provide you with funds after the state has taken their share. It’s vital you still receive the medical care you may need, so you may want to wait to file your claim.

However, it’s imperative you don’t wait too long to file your personal injury claim. Most states, including Indiana, have a statute of limitations in place on claims. In Indiana, there’s a two-year time limit to file personal injury claims: There are exceptions if a claimant was disabled or a minor at the time of an accident. 

How to protect your settlement and Medicaid benefits

Medicaid will determine your continued eligibility based on countable assets. A personal injury settlement is considered a countable asset if it’s deposited in a bank account, invested in stocks, bonds, or mutual funds, or if it’s used to purchase real estate. Non-countable assets include modes of transportation, housing, clothing, and other basic life necessities. If you settle a personal injury claim and it places you above the poverty line, this will also end your enrollment in the Medicaid program. 

However, there are ways to protect your settlement and your benefits, but you may need an attorney to guide you. The right expert lawyer can help you set up a special needs trust. By depositing your personal injury settlement into a trust, you ensure those funds can only be released via stringent guidelines and are not officially under your control.

How a lawyer can help protect you

If you’ve suffered in an accident, the last thing you want to do is worry about how your Medicaid benefits may be impacted. You shouldn’t go through this alone and may need expert guidance. If you are from around Fort Wayne, for example, a personal injury settlement in Fort Wayne would go a long way to help you put your life back on track. The right attorney can examine the merits of your case and any potential settlement you may be entitled to receive.

Legally, there are ways to protect your personal injury claim and your Medicaid benefits, but it’s important you take the right avenues to do so. An attorney you can trust will help you explore all viable options. You shouldn’t have to worry about your medical benefits or avoid pursuing valid compensation.

At Yosha Law, we are passionate about our clients, and consider them part of our family. We will help with your personal injury claim and fight for what you’re owed.