When it comes to the settlement phase of personal injury litigation, plaintiffs and their counsel will typically be focused on the bottom line – how close to their settlement demand has the defendant’s offer come? But quite often a proposed personal injury settlement will introduce a host of additional complications, which make it important to evaluate more than just the bottom line number. The most important such complicating factor is determining how your client is going to get medical coverage once the settlement is done.
All in all, there are lots of ways a client may end up forfeiting the right to continue receiving subsidized medical coverage after receiving a large monetary damages award, so analyzing your client’s health care needs post-settlement is a vital part of any personal injury settlement process. Unfortunately, many lawyers fail to pay heed to this issue, as a result of which their clients end up needlessly squandering some of the significant benefits of the eventual settlement.
As settlement consultants, with expertise in a broad range of health care issues, we often end up advising lawyers on how to help their clients preserve existing coverage or obtain affordable health care coverage as part of an overall settlement plan. Of course, each case presents it’s own unique set of facts, along with particular risks and opportunities. But here are four basic strategies that we most frequently find ourselves considering in helping craft personal injury settlements:
1) Go on healthcare.gov and see if your client qualifies for coverage through the Affordable Care Act. For example, one of our lawyer clients represented a 23 year old girl covered by Medicaid. Her case settled for a lot of money, which would disqualify her from the program. We looked at healthcare.gov and found a plan that would suit her needs for only $450/month and advised her lawyer accordingly. Here’s another example of how a private insurance plan benefitted a catastrophically injured client.
2) Consider Setting up a Special Needs Trust. If the personal injury victim receives Medicaid and is disabled then showing more than $2,000 in assets could jeopardize his or her coverage, unless the settlement money goes in to a Special Needs Trust, an account established and managed by a third party. Now you can also set up an ABLE Account for specific clients, a tax free savings account with up to $100,000 for to achieve the same goal of providing for your clients medical, transportation, education, housing and other needs.
3) Take care of Medicare Set-Aside Issues. If the plaintiff receives or will be receiving Medicare, he or she can lose coverage for the injury related care but all their other healthcare needs can be covered by Medicare. For the injury related care, a Medicare Set-Aside account is set up to protect Medicare’s interests. Medicare Set-Asides requirements can even be met with annuities to save your client money. Also, check with your client’s physician to find out if future accident-related care will be necessary. If the answer is no and the doctor signs an affidavit, the client will not need an MSA.
4) Keep workers comp open. When someone is injured on a job, his or her care is paid for by workers comp throughout the litigation process. It’s your job to see if there’s a way for this to continue once the case settles.
These are just four of the most common ways to preserve your client’s medical coverage, but they are by no means the only ways. Each case is different and the unique circumstances may demand a different solution. We see so many cases that we’ve accumulated expertise as to what does and doesn’t work when navigating the treacherous sea of healthcare in America.