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Settlement Planning for Medicaid Recipients

Settlement Planning for Medicaid Recipients
Sage Settlement Consulting

If your client receives Medicaid, it is vital to have a benefits preservation plan in place before resolving the settlement. As a needs-based government benefit, an asset test is used to determine Medicaid eligibility. Most personal injury settlements are large enough to exceed the asset limit and disrupt benefits. Here’s how to prevent that from happening.

What are the Medicaid asset limits in my client’s state of residence?

Medicaid is a joint federal- and state-funded program that is administered by state Medicaid offices. As such, asset limits vary. In most states, the asset limit is $2,000 for individuals and $3,000 for married couples. California is a notable exception, with new, higher income and asset limits that went into effect on July 1, 2022.

While some claimants may feel comfortable relinquishing their benefits and relying only on their settlement funds, others need as much help as possible. If the claimant accepts a cash lump sum, they will likely have to spend down their entire settlement before resuming Medicaid eligibility. For a claimant with long-term medical needs, the loss of benefits can be financially catastrophic.

Working with a Settlement Consultant

If you are handling a case for a Medicaid recipient, contact your Sage settlement consultant as early as possible. Your consultant will help identify any additional benefits that may be affected by a settlement (e.g., SSI, SNAP/CalFresh, etc.), as well as any outstanding liens that could complicate resolution.

Additionally, the settlement consultant will work with your client to review immediate and long-term needs. If necessary, a special needs trust may be used to shelter the settlement funds from the Medicaid asset limits. The money in the trust can be used to supplement goods and services already provided through needs-based government benefits, providing your client with a better quality of life.

Contact Sage for Settlement Planning Assistance

To learn more about settlement planning for Medicaid recipients, contact your Sage consultant today.

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