In certain circumstances, Medicare requires personal injury and workers comp victims to set up a fund that is sufficient to satisfy the future medical expenses expected at the time of your settlement. Your future medical expenses and funding of the Medicare Set-Aside (MSA) are both approved by Medicare. If your medical expenses exceed the approved amount by Medicare, then Medicare will pick up and start paying where your MSA left off. But you should look long and hard at whether a self-managed Medicare Set Aside is right for you. Here are a couple of things you must be/do before you agree to self-manage your MSA.
1. You have to be a records keeper
If and when the MSA funds run out, you will need to look to Medicare to fill in the gaps and pay for medical treatment that is reasonable and necessary. But in order for Medicare to start paying, you have to present your accounting and supporting documentation to justify the depletion of those funds. Without the accounting and supporting documentation, Medicare will not pay.
2. You have to be a disciplined spender
You absolutely cannot use the MSA account as a slush fund for whatever new product that is out on the market. If you take money out of the account, you’ll have to put it back from your own funds. When this happens, you might think it unfair. But when you rob Peter to pay Paul, you ended up bearing the responsibility to pay Peter back.
3. You have to be accountable to the federal government
Your annual accounting will justify whether Medicare will pick up and pay for any of your medical expenses. Many people don’t want to tell the federal government any more than absolutely necessary. However, you will have to completely inform the federal government regarding this account. If that strikes you wrong, then perhaps a MSA is not for you.
4. You have to actively manage your physical condition
It is your responsibility to manage your injuries and treatment. You should keep your follow up appointments and, if you are in pain management, comply with your pain contracts. You should fill and take your prescriptions and meet with the doctors to determine what, if anything, should be adjusted. There should always be a paper trail showing why you got the last treatment. Just because your personal injury case is over and your MSA is funded, that doesn’t mean that you have the right to not get the treatment you need.
If you can commit to do all of these things, then a self-managed MSA might be right for you. If you struggle with any of these items, then you risk substantial loss when it comes to Medicare paying your medical expenses when the money runs out.
You should discuss the intricacies of MSA’s in deep detail with your attorney before deciding to manage your own. For a consultation, submit an internet inquiry or call me.