How Medicaid Can Impact a Potential Settlement


By: Eric Anderson

After sustaining my spinal cord injury that rendered me a quadriplegic, I hired a personal injury attorney to file a lawsuit on my behalf to seek monetary damages. My case was unique, I was primarily at fault for my accident, but I figured since my damages were so catastrophic that I might be able to get a settlement of some sorts. After all, with everything I had endured any money would help; at the very least maybe it would be enough to purchase an accessible vehicle or pay for some much-needed modifications to my home. When my lawsuit finally concluded the insurance company representing the defendant decided to settle for $60,000, essentially the amount it would cost them to fight the case. I was disappointed the amount wasn’t higher, but my attorney advised that I accept the settlement amount because my case was weak – like I said, my accident was principally the result of my own poor judgement. Having no experience with these matters and trusting my attorney knew best, I agreed to the settlement amount. I knew my attorney would get one-third of the settlement, so I figured $40,000 wasn’t that bad considering I never had a strong case to begin with; plus, there was a lot of things I could do with $40,000 to help improve my living situation. However, upon receiving my settlement check I was shocked to see the amount was for only $20,000.

I immediately contacted my attorney to inquire where the rest of my money was, and that’s when he informed me that the other $20,000 went to Medicaid. My lawyer explained to me that because Medicaid had covered a portion of my medical expenses, that they can seek repayment from any settlement I received from my accident and subsequent lawsuit. I was confused by my lawyer’s explanation for a multitude of reasons. Firstly, I was fully insured through my employer at the time of my accident, I had the best medical coverage money could buy, I had no idea Medicaid paid for any of my medical expenses. Secondly, my attorney never mentioned this scenario to me at any point throughout the duration of my lawsuit. Suddenly, all the arrangements and plans I had made for the $40,000 that I presumed I was going to receive disappeared as quickly as the $20,000 that Medicaid took from my settlement. That’s why it’s important to understand upfront in a personal injury lawsuit that Medicaid’s claim to repayment for medical expenses is highly protected under state and federal law. In many cases Medicaid can and will seek repayment from your insurance company, the other party involved in your accident, or any settlement you receive from a potential lawsuit. In fact, the law can hold you or your attorney responsible for Medicaid’s claim, and often your settlement agreement will contain language stating that you agree to satisfy Medicaid’s claim from your settlement proceeds.

How Much of My Settlement is Medicaid Entitled to?

The good news in this potential scenario is that the law is extremely vague regarding how much money Medicaid can collect from any potential settlement you may receive from a lawsuit related to your injury. While the law is established that Medicaid may seek repayment only from the part of the settlement that pays for medical injuries, most settlement agreements do not make clear what portion of the settlement amount is related to medical expenses. For example, if Medicaid paid for only a small portion of your medical costs, then your attorney can argue that the amount owed to Medicaid did not make up a large share of the settlement amount. Furthermore, in some instances Medicaid may seek repayment for future medical expenses; however, future medical expenses are nearly impossible to determine, and the law only entitles Medicaid to paid past medical costs. This ambiguity in the law makes the amount Medicaid can collect from any potential settlement open for negotiation. Also, there are numerous other factors that your attorney can use to significantly reduce the amount of money Medicaid can collect from your settlement amount. Dealing with the many legal intricacies of the Medicaid bureaucratic monster can be complicated, and that’s why it’s imperative to have a knowledgeable and experienced attorney to help you negotiate and navigate Medicaid laws to maximize the amount of your personal injury claim and lawsuit.

Let Us Help You!

The Spinal Cord Injury Law Firm has vast experience with dealing with potential Medicaid claims and will negotiate to reduce the amount Medicaid is claiming so you can receive the maximum amount of money you are entitled to from any settlement agreement. If you or anyone you know have experienced a personal injury and are looking to pursue a personal injury lawsuit, contact us today at or 1-877-SCI-FIRM for a free legal consultation. We know personal injury, and we will fight for you to receive the justice and compensation you deserve.