"I'm on Medicare."

The rule underneath all of it

Medicare is a secondary payer. Under the Medicare Secondary Payer Act, Medicare does not pay for treatment that a workers' compensation settlement was meant to cover.

Which means: if you settle away your future medical care and then ask Medicare to pay for treatment of that same injury, Medicare can refuse — until you have spent an amount equivalent to what your settlement allocated for it.

That is the actual risk. Not a fine. A gap in your health coverage, for the body part you were hurt on.

What a Medicare Set-Aside is

A Workers' Compensation Medicare Set-Aside is a portion of your settlement carved out and earmarked for future injury-related treatment that Medicare would otherwise cover. You spend it on that treatment, you keep records, and when it is properly exhausted Medicare resumes paying.

It is your money. It is not a fee and it is not withheld from you. It is restricted in what it can be spent on.

It can be paid as a lump sum or structured over time, and a structured MSA is frequently better for the injured worker — it costs the carrier less to fund, which can mean more elsewhere in the settlement, and it replenishes annually so a bad year does not exhaust it.

When CMS will actually review one

These are CMS review thresholds, and the distinction matters:

• You are a Medicare beneficiary now and the total settlement is over $25,000; or
• You have a reasonable expectation of Medicare enrollment within 30 months and the total settlement is over $250,000.

These are thresholds for CMS to review a proposal. They are not legal safe harbors. The obligation to consider Medicare's interest exists regardless of the numbers — a settlement below the threshold still cannot be structured to shift injury-related care onto Medicare. Anyone who tells you a $24,000 settlement means Medicare is irrelevant is describing the review process, not the law.

"Reasonable expectation within 30 months" catches people

You are in that category if you have applied for Social Security Disability, been denied and are appealing, are 62½ or older, or have end-stage renal disease. A lot of injured workers are in it without knowing.

If you are 62½ and settling a large case, this applies to you even though you are not on Medicare today.

Conditional payments — the separate issue

Distinct from the set-aside: if Medicare already paid for treatment that workers' compensation should have covered, Medicare has a right of recovery for those past payments. That gets resolved before or at settlement, and it is a real number that has to be requested and negotiated rather than assumed.

Two different obligations — one looking backward, one looking forward. Both have to be handled.