42 Trial Lawyer • Winter 2023 Medicare’s future interests to prevent shifting the burden of his possible future injury care to Medicare and the taxpayers. His injury litigator referred Vern to an MSP compliance contractor to prepare a Medicare Set Aside (MSA) allocation proposal. It was determined his future injury medicals would amount to $70,000, including prescriptions. After Vern established an MSA trust, he opened a trust account to hold the $70,000 MSA funds, Vern retained the MSP contractor to provide “self-administration support” to handle the annual accounting to Medicare. The MSP contractor enabled Vern to find the best pricing for post-settlement injury treatment and navigate the MSA annual reporting requirements. Vern paid for his post-settlement injury treatment from the MSA trust account. Medicare works hard to deny post-settlement injury medicals until an MSA is properly exhausted and reported. Then, Medicare becomes primary payer once again. At the completion of his post settlement injury treatment, the MSA trust balance was $35,000. His MSA was never exhausted. Medicare remained secondary payer for post-settlement injury medicals. Medicare will be primary payer for non-injury care, as before. At his death, the trust balance will be distributed to his family from the MSA trust. Annual trust tax return preparation and tax payments are the only other allowable expenses paid from the MSA trust account. Linda’s injuries and her care needs were far more devastating than Vern’s. At the time of her injury, Linda was covered by her employer’s ERISA group health insurance. The group carrier was entitled to reimbursement from settlement funds. The plan document provided for no future medical coverage until her settlement proceeds were exhausted. Her initial 12-day hospital stay was covered, subject to deductibles and copays. The group carrier’s lien was negotiated down to $125,000 at the time of settlement. Upon discharge to a nursing home for rehabilitation, the group plan paid for 20 days. After 20 days, the plan determined she was not improving. It then discontinued payment. Vern began paying the $325 per day private pay rate, plus many add-ons, for six months, hoping the physical therapy, occupational therapy and speech therapy would bring improvements in her condition so he could bring her home. Linda never regained her ability to take care of herself and could not be left unsupervised for long. Her cognitive deficits and speech impairment remained severe. Vern visited almost daily but could never be sure if Linda recognized him. Sometimes she did for a little while. Those times were very special for Vern. Looking long term At this point, Vern and Linda’s life savings consisted of their home with a $175,000 mortgage, a replacement Kia, and $500,000 of cash, retirement accounts and other investments. After moving Linda to a specialized TBI inpatient residential care facility, Vern’s monthly out of pocket for Linda’s care averaged $9,500. Settlement would not be reached for over three years. Fortunately, the care facility acceptedMedicaid when Linda became eligible. Medicaid, long term care insurance and private pay are the only sources of reimbursement for the care Linda needed. The couple did not have long term care insurance. Linda wasn’t eligible for Medicaid Long Term Care reimbursement because their savings exceeded $137,400 (2022, adjusted annually). Vern could keep that amount, their home and the Kia. To be Medicaid eligible, Linda could only have $2,000 of countable assets. At $114,000 yearly for Linda’s care, their life savings would Medicare and Medicaid Continued from p 41
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