Medicare & Medicaid Recipients

When the complexities of social insurance programs such as Medicare and Medicaid are added to the settlement mix, settling a case can become cumbersome. Proceeds from personal physical injury and workers’ comp settlements may cause claimants receiving medical benefits to become ineligible for more public assistance. This is unless you decide to utilize a Structure Settlement in conjunction with a trust to protect eligibility.

In structuring your settlement, we make sure that our clients who currently receive public assistance continue to do so. Claimants who receive a settlement can still be eligible to receive Medicare and Medicaid benefits as well as Supplemental Security Income (SSI) payments. A portion of the settlement funds is used to pay for medical and other expenses not covered by social insurance programs. Some of these expenses may include dental, psychological support services, physical therapy, and rehabilitation.

A Medical Disability Trust, or a Special Needs Trust, may also be arranged in order to preserve Medicare and Medicaid benefits. The trust enables the client to benefit from a financially secure lifestyle, as he/she usually has high medical bills that may cause extensive stress and psychological problems. The costs associated with hiring financial planners and fund administrators are also vastly reduced because payments from the trust are guaranteed and, once established, there is not very much necessary for management.


Structured Settlements involving recipients of Medicare and Medicaid should take into account a few very important details.

Firstly, it must be noted that the interests of social insurance programs must be protected with respect to benefits already paid out at the time of settlement. This means that the Structured Settlement must already include these payments made by Medicare and ensure that Medicare is not responsible for payments not included under their coverage. Secondly, funds from the settlement must be used to cover medical expenses of the claimant until they are exhausted; only then will Medicare coverage be available.

Incredible Benefits


IRS Code 104(a)(2) stipulates that periodic payments in the form of a structured settlement are 100% tax-free

Guaranteed Payments

The schedule of payments is determined at the front end of the transaction, resulting in a steady source of safe, reliable income for the claimant.

Rate of Return

With a locked-in rate of return, injured claimants can rest assured that market volatility will not affect their structured settlement payments.

Important To Know

The Center for Medicare and Medicaid Services (CMS) administers settlements involving Medicare and Medicaid and they will not recognize settlements that do not protect Medicare’s interests. Any amount allocated in the structure for future medical expenses should be placed in a Medicare Set-Aside (MSA). This account is established as a means to pay for projected future medical expenses that would have otherwise been covered by Medicare.

To learn more about the effects Medicare could have on your Structured Settlement please contact one of our consultants at Vega Settlement Group.

Securities America Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of Securities America.

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