In the course of a personal injury lawsuit the aim is always to get the injured person the care they need and financial compensation for the costs associated with the injury. In the course of every case a client works with attorneys to make decisions that can have long-term consequences. Clients who are Medicaid recipients often face a crucial choice between pursuing financial compensation and staying eligible for Medicaid.
Medicaid is a need-based program that offers health insurance coverage to individuals who might not otherwise be able to afford it. In Nevada a household with an annual income that is up to 138% of the federal poverty level may qualify for the program. The federal poverty level varies according to the number of individuals in a household. For a family of four in 2018 a household making up to $33,383 annually may qualify for Medicaid coverage. Note that the Children’s Health Insurance Program, or CHIP, extends coverage to children in households with annual incomes up to 200% of the poverty guideline.
A financial award resulting from a lawsuit, whether obtained through settlement negotiations or as the result of a trial, is a financial asset of the prevailing plaintiff. This is true even if a significant portion of the award will go toward outstanding debts. Medicaid recipients are required to report the change in their available resources to the Department of Health and Human Services by the fifth day of the month following the finalization of the award. Quite often these awards exceed the qualifying threshold for Medicaid, meaning a plaintiff must choose between continuing to qualify for Medicaid or accepting the award.
However, there are alternatives to losing Medicaid coverage:
- For relatively small awards a plaintiff may have the option of simply spending enough money within the month to stay below the qualifying maximum.
- Recipients of larger awards may have the option of forming a special needs trust. A special needs trust is a separate legal entity that is created to own assets for the benefit of a person who receives needs-based assistance, like Medicaid and Supplemental Security Income (SSI). Assets placed in the trust can only be used for specific purposes that Medicaid doesn’t cover. Special needs trusts are subject to complex rules and need to be crafted by an attorney.
- Plaintiffs can use awards to pay off debts owed under caregivers’ service contracts provided that the contracts are properly drafted. There can be a range of consequences for doing things this way, which a lawyer can help the plaintiff understand.
Medicaid recipients who have been injured in an accident should not hesitate to talk to a personal injury attorney. For more than 45 years the law firm of Greenman Goldberg Raby Martinez has helped injured clients recover compensation. If you would like to speak to an attorney about your injury, call us today for a free consultation at 702-388-4476 or reach us through our contact page.