By Jason D. Lazarus, Esq.
This blog post will discuss dual eligibility for injured workers. It will address exactly what it is and how Medicaid coordinates with Medicare for those that are dual eligible. Finally, it will talk about the techniques to preserve Medicaid and Medicare.
Some individuals are “dual eligible” meaning they qualify for both Medicaid and Medicare. In certain cases, a Medicare Set-Aside/Special Needs Trust or Pooled Trust Sub-Account may be necessary to preserve the claimant’s dual eligibility. Medicare Set-Asides are a device used to preserve future Medicare eligibility. A Special Needs Trust or Pooled Special Needs Trust is appropriate for claimants receiving Supplemental Security Income (“SSI”) and/or Medicaid benefits. Federal law allows creation of either an SNT or Pooled Special Needs Trust to preserve eligibility for needs-based benefits, such as SSI and Medicaid, post settlement of a workers’ compensation claim.
Dual eligibility is not extremely common, but there is a subset of the injury population who will be dual eligible. Understanding who qualifies for both Medicaid and Medicare is vitally important for the workers’ compensation attorney to insure the injury victim’s benefits are adequately protected. By CMS’s definition, dual eligible claimants are those that qualify for Medicare Part A and/or Part B and also qualify for Medicaid programs as well. Medicare coverage can be obtained prior to age 65 if an injury victim qualifies for Social Security Disability. It takes a total of 30 months for someone that is disabled to qualify for Medicare (Medicare coverage begins 24 months after the first SSDI check is received which takes 5 months and includes the month of receipt, so plus 1 month).
Some Medicare beneficiaries have so little income or assets that they also qualify for state programs through Medicaid that pay for certain out-of-pocket expenses not covered by the Medicare program. There are several different programs that injury victims who qualify for Medicaid may be entitled to that help with expenses not covered by Medicare. In addition, there are services that Medicare does not pay for that can be covered by state Medicaid programs. For example, Medicare does not cover nursing home care beyond one hundred days yet Medicaid does cover that care.
Preservation of Public Benefits for those who are Dual Eligible
For injury victims that are Medicare eligible or reasonably likely to be within 30 months, a trial lawyer must carefully consider compliance with the Medicare Secondary Payer Act (“MSP”). For those injury victims receiving needs-based benefits such as SSI and Medicaid, planning is necessary to preserve those benefits. Federal law found at 42 U.S.C. 1396p, allows for the creation of either a special needs trust or pooled special needs trust for those meeting the Social Security definition of disability. Assets placed into one of these trusts do not count for purposes of qualifying for needs-based benefits. In the remainder of the article, Medicare Set-Asides and special needs trusts will be covered along with the intersection of these two public benefit preservation trusts.
About Medicare and Medicare Set-Asides
Medicare and Social Security Disability Income (hereinafter SSDI) benefits are not income or asset sensitive. If you have a claimant who is a current Medicare beneficiary or is reasonably expected to become one within 30 months, then a Medicare Set-Aside is advisable in order to preserve future eligibility for Medicare coverage. While there is no requirement to establish a Medicare Set-Aside, most carries will require one as a term of settlement in workers’ compensation settlements. An MSA will insure that Medicare’s interests were adequately considered.
Planning for Medicaid or SSI Recipients
Unlike SSDI and Medicare, Supplemental Security Income (SSI) and Medicaid are income and asset sensitive public benefits that require special planning to preserve. In most states, one dollar of SSI benefits automatically brings Medicaid coverage. This is very important, as it is imperative to preserve some level of SSI benefits if Medicaid coverage is needed in the future. SSI is a cash assistance program administered by the Social Security Administration. It provides financial assistance to needy aged, blind, or disabled individuals. To receive SSI, the individual must either be aged (65 or older), or blind or disabled, and be a U.S. citizen. The recipient must also meet the financial eligibility requirements.
Medicaid provides basic health care coverage for those who cannot afford it. It is a state and federally funded program run differently in each state. Eligibility requirements and services available vary by state. Medicaid can be used to supplement Medicare coverage if the claimant has both programs. For example, Medicaid can pay for prescription drugs as well as Medicare co-payments or deductibles.
A special needs trust (SNT) is required if the claimant is receiving Supplemental Security Income (SSI) or Medicaid. An SNT is a trust whose corpus or any assets held in the trust do not count as resources for purposes of qualifying for Medicaid or SSI. Thus, an injured worker’s settlement can be placed into an SNT so that the claimant can continue to qualify for SSI and Medicaid. Federal law authorizes and regulates the creation of an SNT. 42 U.S.C. §1396p(d)(4)(A)-(C) governs the creation and requirements for such trusts. First and foremost, a claimant must be disabled in order to create an SNT.
The Intersection of Medicare and Medicaid – SNT/MSA
If you have a claimant that is a Medicaid and Medicare recipient, extra planning may be in order. If it is determined that a Medicare Set-Aside is appropriate, it raises some issues with continued Medicaid eligibility. A Medicare Set-Aside account is considered an available resource for purposes of needs-based benefits such as SSI and Medicaid. If the Medicare Set-Aside account is not set up inside a special needs trust, the claimant will lose Medicaid/SSI eligibility. Therefore, for a claimant with dual eligibility to maintain their Medicaid/SSI benefits the MSA must be put inside a special needs trust. In this instance you would have a hybrid trust which addresses both Medicaid and Medicare. It is a complicated planning tool but one that is essential when you have those with dual eligibility.
Jason D. Lazarus is the managing partner and founder of the Special Needs Law Firm; a Florida law firm that provides legal services related to public benefit preservation, liens and Medicare Secondary Payer compliance. He is also a founding Principal and Chief Executive Officer of Synergy Settlement Services, which offers healthcare lien resolution, Medicare secondary payer compliance services, pooled trust services, settlement asset management services and structured settlements.