If you have a successful personal injury settlement or judgment, you may expect to be hit with a medical lien soon afterward. This is essentially a legal claim from a hospital, private insurer, Medicaid, or Medicare to recover your unpaid medical costs for the healthcare you received for your injuries after your accident. Unfortunately, these injuries may have left you with a disability, to which you may now have to apply for Social Security Disability Insurance (SSDI) benefits. Or, you may already be a recipient of Social Security Insurance (SSI) benefits. With that, please read on if you are worried that a medical lien will touch your SSDI or SSI benefits, and how a seasoned New Jersey SSDI benefits lawyer at The Law Offices of Sheryl Gandel Mazur can protect your finances as best as we can.
Does a medical lien have a chance to affect my SSDI or SSI benefits?
You may let out a sigh of relief upon learning about the federal law that protects your Social Security benefits from most creditors, including medical lien holders. This is because, to reemphasize, a lien is attached to your personal injury settlement or judgment proceeds, not directly to Social Security deposits. With that said, we strongly urge you to deposit your SSDI or SSI benefits checks in a separate bank account from where your personal injury award is held. You do not want to create confusion by comingling these funds and risk your Social Security from being accidentally claimed by medical liens.
However, it is worth mentioning that, depending on how significant this financial award is, your SSI or Medicaid eligibility may be affected. This is because these are both need-based programs with strict asset limits per household size. So, even when medical liens are applied, you may tip over this threshold and become disqualified for future benefits. With that in mind, it may be in your best interest to place this award in a special needs trust, because here, it may not count as a resource for SSI or Medicaid purposes.
What are the consequences of failing to pay a medical lien?
You must not ignore a valid medical lien on your personal injury settlement or judgment proceeds out of fear that it may affect your SSDI, SSI, or Medicaid eligibility. If you do, medical lien holders may exercise their legal right to sue you or pursue harassing collection activities against you. There may be long-term consequences, too, such as damage to your credit score. However, you generally do not have to worry about this, as an insurance company may not release your settlement funds until these liens are resolved.
But your worry may be more about your personal injury payout being affected, as your medical bills may exceed the award amount. If so, you may have your attorney negotiate with lien holders to reduce or dismiss these claims. Or, your attorney may even assist you in producing a hardship waiver if the lien holder in question is Medicare or Medicaid.
If you are still hesitant about taking the monumental step of applying for benefits, consult with a competent New Jersey SSDI benefits lawyer from The Law Offices of Sheryl Gandel Mazur to get the assurance and confidence you need to proceed. From here on out, we will be with you every step of the way.
