Can Medicaid take a settlement from an injury lawsuit?


Q. A family member who is over age 65 had a fall. She received a letter from Medicaid referring to her current lawsuit, which is not yet settled, and she is under the impression they will be entitled to all of her compensation from any settlement. I think Medicaid is only entitled to what they covered for medical care regarding the lawsuit, but outside of the claim, such as wellness visits to doctors that are unrelated to the incident, would not be included in their entitlement.
— Trying to help

A. We’re sorry to hear your family member was injured.

Medicaid benefits can be hard to understand, but here are the basics.

We want to make sure your question is about Medicaid and not Medicare.

If we are talking Medicare, it has the right to receive two-thirds, assuming the attorney’s fee was one-third, of the “casually related medical payments” that were paid conditionally, said E. Drew Britcher, an attorney with Britcher, Leone & Sergio in Glen Rock.

He said some argue that a “Medicare set aside” must be created for future related care that Medicare would otherwise be responsible to pay, he said.

“If Medicaid, they have a right to be reimbursed for the `causally related’ medical care, but generally agree to take two-thirds of that sum,” he said. “However, if the person now has assets, they may lose their Medicaid until they have spent down the money and reapply.”

Your relative should speak to their attorney, who would have more details on the case, to better understand what would happen to any settlement.

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This story was originally published on Nov. 1, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.