As you know, no client’s needs are the same, and as a result, each of your clients will likely require a different means to fund their Medicare Set-Aside (MSA). Here at MSA Meds, we are experienced in assisting lawyers in helping their clients get the medical care they need while still maximizing their recovery. Please continue reading and reach out to MSA Meds today to learn more about how our team can help you determine the best funding option for your client. Here are some of the questions you may have:
What is the difference between a lump sum and a structured settlement?
When a MSA is funded by a lump sum, the full amount of the MSA will be deposited into an interest-bearing checking account. Once the funds in this account run dry, Medicare will pay the remainder of the bills incurred for all injury-related care.
In a structured settlement, on the other hand, your client will receive periodic payments through their personal injury or workers’ compensation settlement. This type of MSA is funded with annual payments on the anniversary date of the MSA account’s creation, and will continue for the duration of the life of the beneficiary.
In the case that funds are depleted between annuity payments, the Professional Administrator or beneficiary will file a temporary exhaustion accounting with CMS. From here, as long as funds were spent correctly, Medicare will pay the bills until CMS receives the next annuity deposit.
Is a structured settlement better than a lump sum?
Insurance Carriers usually insist on funding an MSA with a structured settlement because it costs them less than funding the MSA with a lump sum. There are some downsides to your client in funding the MSA with structured settlements. Funding MSAs with annuities can result in temporary exhaustion between annuity payments, wherein Medicare will have to take over and pay bills for injury-related care, which, unfortunately, can potentially delay treatment. However, a Professional Administrator can streamline the process and ensure there is no lapse in medical treatment.
Another cause for concern is reversionary interests held by the Insurance Carrier. In a lump sum, any remaining funds will pass to the beneficiary’s estate upon their passing, while in some cases, with a structured settlement, unused funds will be paid back to the insurance carrier.
If you have any further questions, contact MSA Meds today.