Federal Law defines Medicaid as health insurance for those who are needy. It is funded jointly by the Federal and State governments. It covers children, the elderly, as well as those who are disabled. Those who are eligible to receive income from the Federal government (SSI) are automatically eligible for Medicaid. Others must meet either strict income or asset guidelines, or both depending on the particular Medicaid program. Upon the death of a Medicaid recipient, his or her state of residence must try to recover any Medicaid payments from the deceased’s estate. In Massachusetts, this is limited to the probate estate. For this reason, you need to design your estate plan in order that your assets pass outside your probate estate. Attorney Thomas Mullen of Quincy has over thirty years of experience in this area.

How Are Medicaid and Medicare Similar?

Medicaid and Medicare are government funded, and both are designed to provide medical and health services. Both programs are managed by the Centers for Medicare and Medicaid Services. These are both divisions of the United States Department of Health and Human Services. President Lyndon B. Johnson created both of these programs on July 30, 1965, when he signed amendments to the Social Security Act.

How Are Medicaid and Medicare Different?

While Medicaid provides health services for people who are disabled, have few assets and receive little income, Medicare is available to those who are 65 years old or older, and/or disabled, no matter what their income is but only if they have paid into the Social Security system. Medicare is Federally funded, while Medicaid is funded by both the Federal and State governments. It is possible therefore to qualify for both Medicare and Medicaid.

Medicare Secondary Payer/Medicare Set Asides

When someone else or another health insurance program is primarily responsible for a Medicare recipient’s medical coverage, then Medicare becomes the Secondary Payer. If a Medicare recipient has no other coverage, then Medicare is the primary payer, but in cases where there is another program for coverage, then Medicare becomes the secondary payer. This provision was made in 1980, when Congress passed legislation that was designed to take some of the burden off of the Medicare program.

If you were involved in an auto accident caused by someone else, or are receiving worker’s compensation benefits, the person who struck you or your employer’s worker’s compensation insurance carrier is primarily responsible. Medicare is the secondary payor. Therefore if Medicare pays your hospital or medical bills while your case is pending, they have a lien on your award. And after you settle, Medicare continues to be a secondary payor

A Medicare Set-Aside, or Worker’s Compensation Medicare Set-Aside Arrangement allows a worker to set aside part of their award for future medical treatment. Any medical services covered in these set-asides must be related to the worker’s compensation injury, illness, or disease. These funds must be used before Medicare will take over payment for such treatment.
If you fail to do this, you may very well find that Medicare will not pay for your future medical bills related to the accident.

For more information on Medicare, Medicaid, and how to protect yourself from estate recovery, give Attorney Tom R. Mullen a call today at 617-770-1050.

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