Medicaid and Medicare After a Personal Injury Case


This blog entry discusses the basic responsibilities of plaintiffs who receive Medicaid or Medicare benefits after a personal injury case. I will leave the very fine details to those who have law practices that focus on Medicaid and Medicare, and I will try to point you in the direction of those lawyers.

Medicaid and Medicare
Don’t Waste Money – Medicaid and Medicare

Step 1: Subrogation – Medicaid and Medicare

That is pronounced sub-ro–who cares! It means that you have to pay Medicaid or Medicare back if they paid for your medical care following an injury, and you get money from the defendant for the same injury. For example, let us say your leg is broken is a car accident. The ambulance takes you to the ER. Your leg is set. Then, you have to see a specialist several weeks later. Let’s assume that you did not pay for the ambulance, ER or specialist because you are on Medicaid. Let’s pretend that all of the medical bills come up to $5,000.

The car accident wasn’t your fault, so you call a lawyer. You are entitled to recover your damages from the other driver. After all, he is the one who ran the red light and crashed right into your car! Your lawyer lawyer agrees to take your case on contingency – meaning you owe nothing unless you win against the other driver. The contingency fee is one-third of your total recovery.

Now, let us say that your lawyer settles your case $15,000. You owe Medicaid $5,000 because they paid $5,000 for your medical bills. You also owe your lawyer $5,000 because you agreed to pay one-third. That means you get $5,000 of the $15,000 settlement.

I Shouldn’t Have to Pay Medicaid for My Medical Bills!

Ugh. It doesn’t really seem fair, does it? But remember, we are dealing with the government here. Fair or not, they are going to get “their money” one way or another. So, the best thing to do is negotiate.

In the example above, Medicaid pay $5,000, so they plan to get $5,000 repaid. However, lawyers tend to be very good at negotiating. If your lawyer calls Medicaid and is upfront with them, Medicaid will almost certainly negotiate. The lawyer may be able to get Medicaid to agree to take $3,000 instead of $5,000 and agree that they will never get any more money from this car accident. Now, instead of getting $5,000 from the $15,000, your get $7,000.

Step 2: Keep Your Medicaid Benefits Following a Settlement Payout

Let’s keep talking about the example above. You just got a check for $7,000 and you are square with Medicaid. Life is good. But, what happens next month when you break your arm playing football in the backyard with your son?

Every state has a limit as to how much money you can have in the bank and still qualify for Medicaid. Let us assume that your state’s limit is $2,000. By putting $7,000 in your bank account and saving it, you may make yourself ineligible for Medicaid.

Can you use the $7,000 to pay off credit cards? Usually. Can you use it to book a vacation? It depends. Can you give it to your daughter? Probably not. There are some great articles about what you can do with your payout and still qualify for Medicaid. You can read (79) Keeping Medicaid After Personal Injury Settlement or Receiving an Inheritance | LinkedIn, Medicaid – Should you settle your personal injury case? | Indianapolis, IN (, or Medicaid Recipients Can Keep More of an Award Thanks to Recent Budget Deal ( You should read articles like these to know what questions to ask, but really, you probably need help. Your personal injury lawyer will be able to refer you to a lawyer who can help you.

Key Takeaways for Dealing with Medicaid and Medicare After a Personal Injury Case

Nothing is every easy when dealing with Medicaid and Medicare. You probably already knew that and therefore it is more of a reminder than a new lesson. Your two main concerns when settling a personal injury case if you have Medicaid or Medicare is (1) you have to pay them back for at least part of what they paid, and (2) be careful to keep your benefits after you get a payout.