All You Need to Know About a Medicare Set Aside
If you want to significantly reduce the overall cost of a worker’s compensation settlement then it is you that should make use of a Medicare Set Aside or MSA. Once you have a work-related injury then it is your Medicare that is considered to be the second payer for the medical bills that you will have. It is important to note though that Medicare will need to make sure that the interest that it will get as a second payer will always be taken into consideration especially when it comes to settlement-related work compensation.
Different states will have varying settlement process. You can find some states that will include workers compensation claims with other settlements made in the future especially when it comes to medical expenses. And that is why you can also find some states that will have more advantageous work compensation settlement compared to others. This is the reason why it would help once you will know the settlement being provided in your area. Once you will be making use of the MSA then it is the one that can be paid in different ways. You can opt to pay it in a lump sum or with seed money. You can also make use of an annuity to pay future annual payments.
The cost of medical expenses in the future will usually go up due to inflation. Medicare though will not require the parties involved to consider this one. What they would what to assure is the amount of the seed money should equal the amount allocated for the MSA. It is Medicare though that will ensure that the interests that it will have will be protected. This is the reason why it can be beneficial to make use of seed money and annuity since the savings that one can get would be substantial. Once on will be making use of seed money or annuity to pay off their Medicare then it is them that will be able to save a significant amount of money without worrying about the inflation that is going on.
You need to know though that once you will have a very small MSA then it is advisable to make use of an annuity. This is true especially of the payout period that it will have is short. You also will need to understand that you will be inducing different fees associated with annuity payments to fund your MSA. And that is why if the MSA that you have is only minimal then it will not be worth using an annuity to pay it off since the fees will tend to be larger. Once you will be making use of an annuity to pay off an MSA then it is the annuity company that will require the settlement contract to have a detailed funding mechanism and the terms. All of these things will require fees that will be larger than what you will be saving.
If you interested in making use of an MSA then make sure that you will fund it using seed money or an annuity. It is important to make sure though that the MSA is significant enough so that the savings that you will get will outweigh the fees and process required to make it happen.