Medicaid, Medicare, and Work Comp
Many folks that I deal with get Medicaid and Medicare confused with one another, and understandably so. Both provide medical coverage with government funding and they have very similar-sounding names. For people with a worker’s compensation claim, the receipt of Medicaid or Medicare (and sometimes both of them) can have an impact on the case, so it is helpful to have an understanding of what they are and how they work.
Let’s start by defining them:
Medicaid is a need-based, state assisted healthcare insurance program. The state provides health coverage to those who cannot afford it, regardless of their age or disability status. For the first 30 days you are on Medicaid, you receive funding directly from the state. After that, you are assigned to a private health plan that is supplemented by state money. Medicaid pays for 100% of your medical bills with no copays or deductibles passed on to you. Some medical providers to no accept Medicaid patients because they pay a reduced rate.
Medicare as an age or disability-based, federal assisted healthcare insurance program. All US citizens over age 65 are automatically eligible for Medicare. Those who are on Social Security Disability for over two years and certain people with end-stage diseases (like renal cancer) also qualify. Medicare covers 80% of your medical bills and patients have a 20% copay (supplemental plans can be purchased to help with the copay or patients might even qualify to have Medicaid cover the copay). In addition, Medicare charges a slight premium which usually comes out of a person’s Social Security Retirement or Disability benefits.
If a person with a work comp case has injury-related medical bills paid by Medicaid or Medicare, those entities need to be paid back from any settlement or award. Medicaid can be notified of its right to reimbursement via an online portal made available by the state. It is automatically entitled to reimbursement of its bills, but it will frequently give a slight discount to account for attorney fees an case costs.
Medicare has its own department for subrogation claims (i.e., reimbursement from a work comp case). Usually, the work comp insurance company deals with those communications. Bills that must be repaid from the case are referred to as “Conditional Payments,” and there is a specific section of the Medicare Secondary Payer Act that deals with Conditional Payments. Medicare will frequently give deep discounts on Conditional Payment reimbursements if the work comp case redeems for a lump sum.
In addition to Conditional Payments, Medicare takes the position that injured workers should set aside a portion of their settlement proceed for future medical payments. The vehicle for doing so is called a “Medicare Set Aside Account.” Claimants are expect to set aside a reasonable amount of money for future medical when they redeem their work comp case for a lump sum. If the amount set aside is reasonable and the injured worker properly manages the account, then Medicare will step in and pay for future treatment once the account is exhausted and proper accounting is provided.
Dealing with state and federal healthcare systems can be complicated, especially when they intersect with workers compensation or other benefits systems. If you need help navigating these various benefits, it’s best to consult with an experienced attorney.
