Dual Eligibility: When You Have Both Medicare and Medicaid

Medicare and Medicaid are different programs. Medicare is generally tied to age (65+) or to receiving SSDI for a qualifying period, and it is not based on your assets. Medicaid is needs-based, with strict income and asset limits. Some people qualify for both at once, for example an older or long-disabled person with limited resources, and that is what dual eligibility means.

When a settlement enters the picture for someone who is dually eligible, it can threaten the Medicaid side (because of the $2,000 asset limit) and trigger Medicare obligations (because of the Medicare Secondary Payer rules around future injury care). Both have to be handled.

Protecting Medicaid eligibility generally calls for a special needs trust, which keeps the settlement from counting against the $2,000 asset limit. Addressing Medicare's interest in future injury-related care may call for a Medicare Set-Aside. These are two different tools solving two different problems, and a dually eligible person may need both.

The key is coordination. An MSA and a special needs trust have to work together so that one does not accidentally undermine the other. This is among the more complex settlement planning situations, and it is exactly where experienced administration and the right professional team earn their value.