What is a Medicare Set Aside (MSA)?

MSAs generally fall into one of two categories: Workers Compensation or Liability.

A Workers’ Compensation MSA, as the name suggests, is used when a workers’ compensation claim is resolved, and the injured worker is either currently eligible for Medicare or is likely to become eligible within 30 months. With this MSA, a predetermined portion of the settlement is set aside to cover future medical expenses related to the work-related injury or illness that would otherwise be payable by Medicare.

A Liability MSA is created in the event of personal injury litigation settlements or judgments in favor of someone who is a Medicare beneficiary or will become eligible for Medicare in 30 months. Much like a Workers Compensation MSA, part of the judgment is set aside to cover future medical expenses related to the injury that would otherwise be payable by Medicare. Only in this case, the injury is the result of an auto accident or some other personal injury claim.

First and foremost, Medicare has to determine whether a MSA is necessary. This means finding out if the injured party who received a monetary judgment is currently a Medicare beneficiary or will become one in 30 months.

If so, the process begins to establish what future medical expenses will look like that are directly related to the injury claim. This may involve consulting with medical providers, reviewing medical records, and considering factors like the injured party’s age, medical history, and the severity of the injury.

Once an estimate of future medical expenses is determined, then a portion of the judgment or settlement is set aside to fund the MSA and meet those needs. Again, these funds are completely separate from any other account or fund, and must only be used for medical expenses directly related to the personal injury or workers compensation claim that Medicare would otherwise have to cover.

The MSA can be self-managed by the patient, or by a professional administrator. Due to the need to account for all funds at all times, pay medical expenses in a timely manner and submit annual reports to the Centers for Medicare & Medicaid Services, most Medicare beneficiaries choose to hire a professional to handle their MSA.

If the MSA funds are depleted and the injured party still requires medical care related to the claim, Medicare will step in as the primary payer for those expenses, as long as the MSA funds were used appropriately and all reporting requirements were met.

If you are currently a Medicare beneficiary, or expect to turn 65 within the next 30 months, and have recently obtained a financial settlement from a personal injury or workers compensation claim, give Insurance Professionals of Arizona a call.

Recovering from a serious injury is hard enough without having to negotiate with Medicare what your future medical expenses may look like. Our Medicare experts have extensive experience in all aspects of Medicare Set Asides, which we can put to work for you while you start down your road to a full recovery.