Hello.
My mom (74- Colorado) was involved in a car accident as a passenger. Thank God she's doing well now. The driver of the car hired a lawyer and wants to settle the case.
My mom is on SSI, Medicare and long term medicaid and I'm afraid if she receives any funds it will disqualify her from these programs that she rely on.
The lawyer is a joke. He's clueless about Medicaid rules and he keeps pushing her to sign the settlement. Looking around the web, I founds some folks talks about spending down the funds by buying a car or pay debt. My mom owes my brother and my sister a large amount of my money, but how to justify it without jeopardizing her program? I have no idea. Also, she doesn't drive. I'm the one who takes care of all her needs from doctor appointments to grocery shopping (and everything in between).
I read also about special need trust, but that's for folks who are 65 years old or younger.
Any help would be appreciated. Thank you and God bless.
Is she really on Medicaid? This is an important piece of information.
Please read the replies and further questions from igloo572.
If she's currently not a Medicaid recipient but you're worried about her qualifying in the future, please know that she first needs to be a candidate for LTC and also qualify as financially needing this benefit. Most states' "look-back" period is 5 years. She is only 74, so chances this window wont affect her. I would consult a Medicaid Planner for Colorado, since the rules vary by state. She should also consult with an estate planner to know what she should do with that settlement money.
If she owes money to family members, is there a paper trail? A loan document that states the amount and terms of the load, is signed and dated by both parties? If it's just a verbal agreement, this may be a problem. Or, if there's no document did the money go to pay for things for her care? Are there receipts? If not, there needs to a record of this loan or debt.
https://www.jbplegal.com/blog/personal-injury-settlements-medicaid/#:~:text=Some%20property%2C%20such%20as%20a,financial%20prospects%20haven't%20changed.
https://www.bjflaw.com/pitfall-perils-receiving-settlement-funds
Yes the settlement will be assets for her and she will lose medicaid unless they are specially protected if they can be, and I doubt they can be.
You might spend on an elder law attorney who IS up on medicaid and has nothing to gain from this settlement. Meanwhile you have time and won't lose this offer. You need someone familiar with the rules.
Any attorney who tells you he knows nothing about the legalities of something is telling you to "get yourself another attorney".
Medicaid is a huge, huge # of programs each run by your State under a joint federal & State $ based on demographics. It’s really important for you to understand what program(s) your folks are on and might be able to file for. Some have very tight & narrow requirements to their application (LTC Medicaid) but others are more general low income your good to go type of application (Medicaid as health insurance). Some are more in between like IHHS aka In Home Healthcare which is a Community based Medicaid program. Some programs are coshared costs, like PACE which are Medicare & Medicaid day programs that are very on trend nowadays.
The biggest “Medicaid” is Medicaid as health insurance & it’s related coverage and it’s a huge umbrella of types…. It’s CHIP, it’s WIC, it’s ACA / Obamacare if your State took Medicaid expansion. And it’s also Medicaid as old school been around forever available to those who are low income or become disabled.
I'm going to guess the folks are “duals”: are on MediCARE & MedicAID so “duals” for coverage for health insurance. And they are either Original Medicare for Part A (hospitalization, rehab, some other costs) with Medicaid as their Part B secondary insurance (doctors, clinics, labs, etc); OR they went onto a speciality Medicare Advantage Plan available to “duals” that is done by an insurance company, like Humana, BlueCross or United but has a narrow in-network for those on Medicaid. That your folks Medicaid is about health insurance coverage.
If so, they are not LTC Medicaid.
Again please look at that settlement form to see if ANY monies paid by moms Medicare or Medicaid or any other health insurance was included in the payout. Because if it was, Medicare will want their $ paid back. And other insurance may as well. Good tort attorney’s know this and know how to repay. But if this guy doesn’t or doesn’t care, it’s not him that will be screwed when it surfaces. It will be your mom and she more than likely have her SSA monthly income partially debited to repay.
For a lawsuit, in my understanding, the $ she would be able to keep realistically would be whatever “pain & suffering” “inconvenience costs” the settlement $ would be. She doesn’t work so didn’t loose income, so zero $ on that front. She wasn’t the paid caregiver for someone, and unable to do that to the point that another caregiver needed to be hired, so zero $ on that front as well. If her pain & inconvenience come to a few thousand, that’s it. I’d be real concerned that the atty inflates the numbers by putting in all the hospital and healthcare costs as it can easily go six figures $$$$$. But once insurance removed, actual $ to her less all paid to Attorneys, all paid to the court….. it’s teeny & that’s the $ figure you speak with an elder law attorney- preferably a CELA level one - about how best to deal with for their future care needs.
May not be enough to make doing a structured settlement worthwhile.
Go onto Bogelheads to read posts on structured settlements and problems on doing them after age 70.
Not to be ugly about this but once you hit age 62 (age you can take early SS retirement income) and for sure once you hit FRA / full retirement age, your value plummets to zero for any type of lawsuit. You need to be a higher income professional in your 30’s - 40’s with your elementary age kids in faded clothing holding empty bowls in the courtroom to get big time $ in a lawsuit. Cue the music from “Oliver” in the background too.
I always say this when people threaten to sue doctors and LTC facilities. The sad fact is that your value has plummeted as you say, to zero. No attorney will invest his time and money to prove a "point". He needs to win damages. And in the case of someone over 62--sorry--we are completely expendable.
But onto the settlement…Please pls PLEASE be aware that MediCARE has “Secondary Payor Act Requirements”. So IF the attorney in the lawsuit put all the $ paid by Medicare into the overall dollar amount of the settlement then $ paid by Medicare has to be repaid to Medicare due to the Medicare Secondary Payor Act. Act went into effect as part of Bush era Deficit Reduction Act in 2005. CMS aka the Centers for Medicare and Medicaid will eventually ferret out that this has happened and seek out the $ due and they can enforce getting paid.
Why is this important? This cannot be overlooked as Medicare can attach a lein onto her Social Security income to recover the $ paid to your mom as part of her settlement BECAUSE Medicare as it’s a federal agency is a supercreditor & can do this. What a good tort attorney will do is set up a separate escrow like account to have the $ due back to any health insurers that have a “secondary payor” type of repayment requirement in terms of their policy - eg Medicare, Medicaid, Blue Cross, etc - that had monies included in the overall lawsuit (so the $ amount is super inflated due to including all medical costs) place into this escrow like account. It’s used to pay the health insurance co. If something like this was done in moms lawsuit and her health insurance were not paid, and later on, they come wanting to to repaid its all her responsibility to pay and they will seek to get the $ from her. NOT the attorney. The responsibility ultimately is hers.
fwiw on another forum I’m on there is an elder who had this happen due to a slip n fall and they are currently having their SS retirement income debited by 1/3 to repay for the Medicare settlement that was not withheld. The parent cannot make ends meet and their kids are having to pay their parents bills. Fortunately they are not dealing with being in a NH or Medicaid or other “at need” programs as that’s scrutinized income. Theirs is literally not able to buy groceries and pay for utilities and won’t be for years as it’s like 80K of Medicare healthcare costs that was paid. They negotiated to have 1/3 of SS monthly taken to repay. So between that and the regular taken to pay for part B health insurance, it’s quite a chunk. It’s the Feds, they’re a supercreditor, they can do this.
Now medicaid is run by each State. Whether a State does this as well and they too want their own recovery of costs paid if included in the settlement will entirely be determined by your State Medicaid.
also I’d suggest that you please check to see how if in the future should any changes to a structured settlement once finalized has to happen how involved it would be. If I’m not mistaken should any changes need to happen afterwards, it requires all to be done before a judge. So if that is the case, that means get an attorney and fresh costs plus court fees, which is all on your mom or you to pay.
Also If structured get dealt with like annuities for LTC Medicaid those tend to either be
1. Have to be cashed out completely and then spent down, so off LTC Medicaid till once again impoverished
or 2. Stay in pay out mode if their income stays within limits BUT have a requirement for a change in after death beneficiaries to have it have to become the State in order for her to be eligible. So someone - like her POA - would have be come up with the $ to pay for the atty to do whatever legal cost to change it either way for the settlement.
Structured have a lot of safeguards- like having to do changes before a judge - because most often folks who file these are severely disabled.
btw I’m with the others that she needs to consult with her OWN legal & asap.
I don’t know the answers to your questions but stick around for others to respond to your concerns.
Wishing you and your family all the best.