How to Save Money on Medicare Set-Asides


As healthcare costs continue to rise, it is increasingly important to preserve as much of your client’s settlement as possible. Funding a Medicare Set-Aside (MSA) with a structured settlement can be more cost-effective than funding with a lump sum. Here’s why:

Rated Ages

First, if your client has a diminished life expectancy, rated ages may be used to lower the cost of lifetime structured settlement annuity payments (i.e., higher annuity payment for less money). For instance, based on a life company’s underwriting guidelines, your 30-year-old injured client may have a rated age of 60 years old.

The Primary Payer Switch

Next, the MSA is established using a deposit of “seed money.” The structured settlement then makes annual deposits and any balance remaining at the end of the annual period carries over. If the MSA is exhausted within a given annual period, Medicare resumes as the primary payer for the remainder of that period. On the other hand, if your client chooses to fund an MSA with a cash lump sum, the entire MSA would have to be depleted before Medicare resumes as the primary payer. Upon the death of the claimant, money remaining in the MSA is distributed to the beneficiary(-ies).

By funding the MSA with a structured settlement, your client may net more money in the long run. A structured settlement-funded MSA builds value over time, with Medicare potentially reassuming the role of primary payer at certain points.

BONUS SAVINGS TIP- Consider Professional Administration

Although claimants have the option to self-administer their MSAs, paying for professional administration may be more economical. Not only do professional administration companies help maintain accurate Medicare reporting, but they also help prevent billing errors and may even have discounted cost arrangements with medical and prescription providers.

Contact Sage for Medicare Set-Aside Assistance

Is your client a Medicare beneficiary? Contact your Sage consultant to ensure your client has a plan in place to protect Medicare benefits and preserve settlement funds for the long term.

Dial (855) 288-7243 or complete an online form today to get started.