Medicare set aside faq?

Are you ready to fall asleep reading about the oh-so-exhilarating topic of Medicare set asides? Well, too bad! Because I’m here to make it slightly less boring (key word: slightly) and answer all your burning questions. So buckle up, buttercup!

What is a Medicare Set Aside?

Before we get started on the nitty gritty details, let’s define what a Medicare set aside actually is. A MSA is an account that funds future medical expenses for individuals who have received a settlement or judgement in regards to a workers’ compensation claim or personal injury lawsuit.

Why Do I Need One?

Great question! You need a MSA because if you receive any type of settlement related to an injury or illness that was covered by Medicare, those funds are required by law to be used solely for medical expenses related to that specific issue. Failing to do so could result in penalties and fines from good ol’ Uncle Sam.

How Much Money Should Be Put into My MSA?

Ah yes, the million dollar question (or maybe just thousands of dollars). Unfortunately, there isn’t really a “one size fits all” answer for this one. The amount placed into an individual’s MSA depends on several factors such as age, life expectancy, severity of health issues and expected cost of treatment.

Pro Tip:

Don’t want sticker shock when receiving your bill from the doctor’s office? It might be wise to estimate high when planning out your MSA.

Can Jeopardize My Current Benefits if I Take Part in This Program?

Nope! Participating in the program won’t affect your current benefits at all! MSAs are strictly separate accounts and will not impact Medicate eligibility or enrollment whatsoever.

##### Reminder:
The relationship between MSAs and private insurance can vary though so it’s always best to check with your plan first.

Who Determines How Much Will Be Placed In My Account?

The amount of money placed into an individual’s MSA is determined by a professional administrator. This could either be a private contractor or the Centers for Medicare and Medicaid Services.

Fun Fact:

In 2021, individuals who receive settlements exceeding $25,000 are required to submit their proposed settlement agreements to CMS for approval.

What Happens if I Use Money from My MSA on Something Other Than Medical Expenses?

This is a big no-no! The funds in your MSA are use specifically designated solely towards medical expenses related to the injury/ illness you received settlement for. Using those funds elsewhere can result in serious consequences including penalties and revoking of medicate benefits.

Final Thoughts

There you have it people! Everything (or at least most things) you need to know about Medicare Set Asides without completely falling asleep mid-article. Remember, MSAs may not be the most exciting topic but they’re important nonetheless so make sure you do your research before diving in headfirst!

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