Comment by John T. Carney, Jr.
Johnny is a twenty-three-year-old disabled man, who spends most of his time at home under the care of his family or working a few hours a week at a part-time job. He must regularly travel to his physician's office for physical therapy and medical evaluation. Because of his disability and his financial situation, Medicaid funds his care and pays for the majority of his medical expenses.
While driving to his physician's office, another vehicle runs a red light and crashes into Johnny's car as it enters the intersection. Following the accident, he is not only disabled, but now mentally and physically helpless. After the threat of a lawsuit, the driver's insurance company settles a negligence claim for one million dollars.
Shortly thereafter, the state department of health and hospitals (DHH) sends Johnny a letter, informing him that Medicaid will no longer fund his care because he has exceeded the financial eligibility requirements. In addition, the DHH demands reimbursement for medical expenditures made after the accident. Johnny will now have to totally fund his own medical care using the settlement proceeds and any other assets that he may have. Furthermore, he will lose a substantial portion of the settlement to the DHH for reimbursement.
This Comment addresses the situation in which a disabled individual is injured by a third party, receives compensation, and thus loses government provided medical benefits. In these cases, the government often inflicts a second injury by rescinding Medicaid coverage and then demanding payment for previous medical services. Many courtroom players, including judges and attorneys, fail to consider these issues when arranging to transfer a large settlement sum to a disabled plaintiff. Nevertheless, these issues must be resolved in a way that furthers the public policies behind government assistance programs.
This Comment begins with a discussion of health care costs and concerns, especially for a disabled indigent who is injured and receives a large settlement. Part III introduces the special needs trust, a means by which eligibility for certain state benefits may be maintained. Part IV discusses the practical implications of the 1993 amendments to the Medicaid laws, especially for those who receive benefits as part of a tort settlement or personal injury award. Part V provides instruction for judges and attorneys on forming special needs trusts and describes how they actually work. Finally, Part VI addresses the problem of state reimbursement claims and how such claims undermine the entire system. Even though this Comment primarily looks to Louisiana law for examples, the law in this area is fairly uniform across the country and the actual state is of little consequence.
Health care is a vital and necessary concern not only for the disabled poor, but for all Americans. An introduction to the current state of health care for the disabled will illustrate the major problems and the supposed solutions provided by the Federal Medicaid Program.
About the Author
John T. Carney, Jr. J.D. candidate 2001, Tulane University School of Law; B.A. 1998, University of Alabama.
Citation
75 Tul. L. Rev. 165 (2000)