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When do you need a Medicare Set Aside?

Simple Answer: An MSA is just an organized way to show Medicare that you took their interests into consideration at the time of settlement. An MSA is never required, but many parties to a settlement choose to specifically put together an allocation report showing items that are related to the injury and would be covered by Medicare. The report is called the MSA. MSA's can be submitted to Medicare for review and approval if they are significant to meet Medicare's review thresholds; in any event, the process of review and approval is voluntary. Getting approval just means Medicare has validated the amount set aside is accurate. 

Under Section XVIII of the Social Security Act, on any injury settlement, “Medicare’s interests” must be taken into consideration. It is never required, but often parties to a settlement will choose to put together a medical allocation report that specifically lays out the costs that Medicare would cover and that are related to the injury in a MSA report.

Medicare has offered to review and approve the amounts of these allocation reports only when the injured party is Medicare eligible or will potentially be Medicare eligible in the next 30 months and the amounts are significant enough for review. While Medicare has offered to review significant cases, the review process is entirely voluntary. The thresholds for review are:

1) • The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00; or

2) • The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00

An individual is eligible for Medicare after they turn 65 or they can be under the age of 65 but are receiving Social Security Disability Insurance (SSDI). There can also be exceptions to the rule in some settlement cases.

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