How does Medicare affect personal injury settlement compensation?



Medicare is an entitlement program that provides health insurance for most Americans aged 65 and older, and to younger persons with certain disabilities and diseases.

Since Medicare is an entitlement program, rather than a needs program, a personal injury settlement or verdict will not affect a person’s eligibility to receive Medicare benefits.

However, by operation of law, Medicare has a “first right of recovery” against any compensation that is related to treatment in which Medicare has paid. For nursing home neglect victims, to the extent that Medicare paid for any of the treatment, then Medicare is entitled to be paid back that amount from any settlement by the liable party.

In fact, Medicare’s right to reimbursement stands ahead of any other party, including other government programs like Medicaid. Even further, Medicaid must be paid prior to the distribution of the settlement to the client or the client’s attorney.

In essence, Medicare has a ‘lien’ against the proceeds of a personal injury settlement. But, like most liens, this amount can be negotiated down in order to put more money in the pocket of the client.

This is why it is very important for a Medicare recipient who has been injured at a nursing home or assisted living facility to hire a personal injury lawyer. An experienced personal injury lawyer can negotiate with Medicare to reduce the lien amount. Because Medicare does not have its own ‘collections’ department, the personal injury lawyer basically acts as a money collector for the government, i.e., going after the at-fault party for compensation. Since Medicare would not receive that money without the injured person hiring the lawyer, it reduces the lien amount as an incentive.

If your loved one has been injured at a nursing home or assisted living facility, and you are wondering how Medicare benefits will be affected, or how Medicare repayment will work, then please, feel free to call and speak to one of our experienced Atlanta personal injury lawyers today. Our consultations are always free.